Google has been sued for the second time in less than a week for selling low-quality ads on parked domains.
Google has been sued for the second time in less than a week for selling low-quality ads on parked domains.On Thursday, Kabateck Brown Kellner filed a lawsuit against Google in U.S. District Court, in San Jose, Calif., on behalf of plaintiff RK West, a company doing business as Malibu Sales.
The complaint charges that Google defrauded its advertising customers by charging them for invalid clicks on parked domains.
Parked domains, as Google acknowledges, "generally have no content." Nonetheless, Google believes in helping searchers find them.
The complaint contends that Google used ads on parked domains to launder invalid clicks. "Since Google profits from all generated clicks, regardless of validity, [it benefits] by actively hiding source of invalid clicks being charged to its advertisers," the complaint says. "Hiding the source of parked domain clicks launders invalid clicks and makes any claims of invalid clicks from these sites nearly impossible to show."
Strictly speaking, this is incorrect. Google profits from all valid clicks; it doesn't bill for acknowledged invalid clicks. However, not all invalid clicks are acknowledged.
The issues raised in this lawsuit mirror those raised in the one filed on Friday, July 11. The respective attorneys claim their clients were defrauded because Google failed to provide enough information to evaluate the effectiveness of purchased ads and to control the placement of purchased ads.
Changes made to Google's advertising programs appear to have addressed the problems raised in both domain parking lawsuits. Google will nonetheless have to hash out its past practices in court.
In Google's earnings conference call on Thursday, Google CEO Eric Schmidt attributed some of the company's higher general administrative costs to legal fees. It seems that when searching for revenue, both attorneys and advertisers turn to Google.
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