Friday, August 13, 2004

Google, Yahoo Make Nice over Patent and Stock Disputes

TECH COMMENTARY I'd been predicting that Google would implode over this patent dispute, but it looks like it was settled for only $290 million on Tuesday. Google, Yahoo Make Nice over Patent and Stock Disputes - Overture had accused Google of infringing on its patent for bidding on keywords in paid-search results. Both companies sell sponsored search listings where advertisers place pay-per-click bids on search terms. The interesting thing was that the original Overture patent specifically cited a ranking mechanism whereby the highest bid gets the highest placement.... Google's engineers were aware of this, so AdSense organically returns the "most profitable" ads - if an ad that pays $.05 CPC gets half as may clicks as an ad that pays $.03CPC, it makes sense to put the lesser up top. Smart thinking - but not smart enough to avoid a few years of legal dickering and much investor trepidation.
  Permalink 8/13/2004 02:49:00 PM
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