Google is profiting from millions of typo-squatting websites that earn advertising from Google's Adsense advertising program, Harvard University professor Ben Edelman says.

In a report published Monday, Edelman says Google profits from typo-squatting websites that run ads using Google's Adsense -- which, ironically, are often bought by the owners of the legitimate sites web surfers were trying to visit.

"This is one of the unsavory ways we all end up paying Google," Edelman says in an interview. "Users don't have to write Google a check to receive Google's services. But, one way or another, Google manages to get users' money."

Typo-squatting sites are found at domains that have one letter different from legitimate, trademarked domains -- bankofdamerica.com, for instance, as depicted in the screenshot above, which has a "d" in the URL.

Typo-squatting has been around since the beginning of the web, but until recently, typo-squatters had limited means of profiting from surfers' bad spelling or clumsy typing. But using Google's Adsense for Domains (AFD) program, typo-squatters fill their sites with sponsored links that often point to the legitimate domain. If a misdirected surfer hits a sponsored link, the legitimate domain owner ends up paying the typo-squatter for that referral, and Google as well.

The typo-squatter Bankofdamerica.com, for example, has a sponsored link to the real Bank of America website. Typo-squatting, Edelman says, is illegal.

"There sure are a lot of these sites, in the millions," Edelman said. "The overall majority show Google ads."

Google reported net income of $1.25 billion for the quarter ending June 30 on revenue of $5.37 billion. Advertising generates about 99 percent of Google's revenue, according to its financial statement.

Google says in a court filing that it has "no reason to know" whether a domain in its advertising program "could infringe a valid trademark."

Edelman, an assistant professor at the Harvard Business School and an advisor to McAfee, says there are as many as 80,000 domains "typo-squatting" on the United States' top 2,000 websites alone, including MySpace, FaceBook and Craigslist.

Edelman's report, published in the McAfee Security Journal (.pdf), shows that there are as many as 251 typo-squatted domains associated with Bank of America alone, and there are as many as 327 typo-squatted domains feeding off the cartoonnetwork.com site.

Edelman and other lawyers have filed a class action lawsuit representing domain owners who claim the Google Adsense for Domains (AFD) program is assisting in violating trademarks. A hearing is scheduled for as early as next month in which Edelman will ask an Illinois federal judge to allow the case against Google to proceed.

The Mountain View, California, company did not respond for comment on how much revenue is generated via typo-squatting.

But Google attorney Maria Moran says Edelman's allegations are "misguided," and that Google is doing nothing illegal because it "merely distributes third-party advertisements."

Google is immune from liability, she adds. "Google's sweeping trademark protection policies provide that Google will immediately remove any allegedly infringing domains from its AFD program at the request of the trademark holder."

Edelman, however, said Google is attempting to confuse two laws: the Anti-cybersquatting Consumer Protection Act with the Digital Millennium Copyright Act.

The DMCA "safe harbor" provision protects sites from claims that they host copyright infringing material if that material was put there by users and if the sites remove material upon notice from copyright holders. Google relies on the safe harbor provisions to avoid liability for videos posted on its YouTube site, for example.

But Edelman says Google is wrong to try to invoke a notification safe harbor as a defense to typo-squatting. 

"There is no similar safe harbor doctrine as to trademark infringement or typo-squatting," Edelman says.

The law simply says, "do not typo-squat. Do not register, traffic in or use infringing domain names or confusingly similar names of trademarks," Edelman says, referring to the Anti-cybersquatting Çonsumer Protection Act of 1999.

Google says in response to the lawsuit that it "has no way to know -- and no reason to know -- whether a given domain in the AFD program could infringe a valid trademark," Google's Moran writes. "And even if Google did somehow have the ability to pluck out those domains which could infringe a valid trademark, Google has no way to know who has registered the domain, be it an infringer, a licensee of the trademark owner or the trademark owner itself."

by David Kravets for Wired.com

Also on Wired.com:
Obama's New Ad Frontier: Video Games
YouTube Introduces Video Search Ads
Gallery: Golden Age of Trains, in Black and White

Subscribe to Wired magazine