I’ve had enough questions lately about why I started focusing on brand sponsored piracy that I thought it important enough to give credit where it’s due. It all started with this quotation from Professor Eric Goldman, commenting on the dip in Google’s stock price after the announcement that it had dodged a career-ending indictment for promoting the sale of illegal drugs when the Department of Justice allowed the company’s executives to pay a fine with $500,000,000 of the stockholders money.
The Google drug dealing case was followed by a still-ongoing shareholder lawsuit that named, among others, the entire Google board of directors and certain executives including Larry Page and Sheryl Sandberg. Yes, that Sheryl Sandberg.
Here’s Professor Goldman’s money quote, so to speak from the New York Times:
“Web companies can be held liable for advertising on their sites that breaks federal criminal law, and Google and other search engines have faced similar issues over ads for illegal online gambling sites [see, e.g., “Poker Money and the Ethics Professor“]. Eric Goldman, director of the High Tech Law Institute at Santa Clara University, said the latest investigation raised questions about Google’s dependence on such sources. ’How much of Google’s overall revenues are tied to product lines that are questionable?’ he said. ‘For investors, I think they just got a little bit of a jolt [after Google reserved $500,000,000 to pay its forfeiture in the drugs case] that maybe Google’s profits are due to things they can’t ultimately stand behind.’” (emphasis mine)
Bingo. They do the same on pirate sites. Ergo, Google profits from piracy. A lot. And probably illegally if the DOJ can stop apologizing to Google long enough to do its job.
An interesting post from Jack Marshall on advertising industry site Digiday:
Visit the top torrent search engines, and you’ll find ad calls from Yahoo, Google, Turn, Zedo, RocketFuel, AdRoll, CPX Interactive and others. These sites exist to connect people with illegal downloads of intellectual property, a practice that’s estimated to cost the U.S. economy $20 billion in the movie industry alone. No matter your feelings about U.S. copyright laws, they are laws, and there’s no doubt these sites facilitate illegal behavior, even if they don’t house the content themselves. The oxygen that sustains many of these sites is advertising, delivered by the vast archipelago of the ad tech industry.
According to AppNexus CEO Brian O’Kelley, it’s an easy problem to fix, but ad companies are attracted by the revenue torrent sites can generate for them. Kelley said his company refuses to serve ads to torrent sites and other sites facilitating the distribution of pirated content. It’s easy to do technically, he said, but others refuse to do it.
“We want everyone to technically stop their customers from advertising on these sites, but there’s a financial incentive to keep doing so,” he said. “Companies that aren’t taking a stand against this are making a lot of money.”