March 30, 2005

Google as the MVWE ("Mountain View Word Exchange")

To what extent can someone own a word or phrase? Can the owner of a name control what others are allowed to respond if asked about it? And what do you think about lexicographic options and futures, or phrasal arbitrage?

On 3/27/2005, Doreen Carvajal has an interesting article in the IHT, reprinted in the NYT, exploring the proliferation of lawsuits against Google's keyword advertising. Her article focuses on certain questions in trademark law and related intellectual property issues. The owner of a trademark or service mark Foo® can get the courts to stop you from operating as Foo, at least in a sufficently similar business. But can they stop you from suggesting to third parties interested in Foo® that they should consider an alternative product or service like Bar®? So far, the answer is: in France they can, but in the U.S., England and Germany they can't.

The crucial issue is whether Google should be able to sell, to anyone interested in paying for it, the right to pop up one of those little right-column ads when an internet pilgrim asks about (say) Hennessy or Vuitton. The advertiser might want to offer genuine Louis Vuitton brand goods, or pirated knock-offs, or testimony from top fashionistas that another brand is *much* more elegant and desirable, really... or a rant about pretentious overpriced junk. Google doesn't care, as long as the advertiser pays the bill. LVMH Moët Hennessy Louis Vuitton and other companies have sued Google in France and won their cases, and Google has not only paid the (small) damage awards but also removed keyword advertising for (some?) trademarks from its French site.

I think there's something bigger and more interesting going on here. A couple of days ago, my colleague Michael Kearns suggested, only half in jest, that Google's most important innovation has not been improved search, but rather the invention of a new kind of market -- a market for words. Look at Google's introduction to AdWords, and especially consider the meaning of "maximum cost-per-click" (CPC), and you'll see that he has a point. In effect, this is a market where advertisers bid against one another for words. Removing trademarks from this market would decrease the total value of the goods traded (and would hurt Google's revenues), but it wouldn't change the basic nature of the situation.

And how long will it be before the usual array of derived instruments for hedging and speculation appears? Someone could make their living by guessing what unheralded keyword will go platinum next year, or what hot little morpheme will be all but worthless in six months.

Seriously, I think there's a clash here between two ideas about property and trade. Marketplaces like AdWords (or the similar systems at other sites) are trading in a certain kind of lexical property, namely the right to show an ad to search engine customers who ask about a certain word or phrase. Anyone at all can get into this market, for a tiny entrance fee, although the bidding can make some words very expensive. A company like LVMH Moët Hennessy Louis Vuitton wants to maintain control of the words that it owns, using the power of the state to keep its words out of this unruly lexicographic marketplace. It's probably not an accident that the country that gives the greatest monopoly power to the owners of words is France, where the feudal tradition of state-awarded monopolies in various areas of manufacture and commerce seems to have survived as a cultural value, though under a variety of different ideological labels.

Although the specific issues here are completely different from those involved in the recent French response to Google's digital library initiative, I get a Cathedral vs. Bazaar feeling from much of the recent news from Paris. I'm not talking directly about the property-rights aspect of open-source software here, but about the ideas of social organization: as Eric Raymond put it in the blurb for the First Monday publication of his essay, there are "analogies with other self-correcting systems of selfish agents". Whether your sympathies, or your legal theories, are on the side of Google or on the side of the trademark holders, there's the independent question of your attitude towards market-like mechanisms. Some people like them; I get the impression that the French, on the whole, don't.


Posted by Mark Liberman at March 30, 2005 09:09 AM