Restrictions will still apply to trademarks included within the text of the advertisement.
The change, which takes effect on 5 May, means that non-trademark owners will be able to place paid search ads in Google's UK search results pages when users search for trademarked terms and brand names.
Previously if someone was searching using a trademarked name, the site of that trademark owner would appear at the top of the search results and competitors would not be listed.
The new policy means that rival sites will be allowed to appear in sponsored search results when users query a specific brand or company name.
Several companies, including Lastminute.com and Autotrader, have expressed outrage over the move, and some are considering legal action against Google.
Google has responded by saying that it made the changes in order to improve its service to users, and not to fleece advertisers.
"We are absolutely making this change because we believe it improves our service to users," Matt Brittin, head of Google UK, told Channel 4 News.
"If we do things that are right for users then we would expect to make some money out of it, but it is not something we are doing because we believe people will have to pay more for their trademark terms."
Ian McCaig, chief executive of Lastminute.com said that it is currently assessing its legal position and will take action as per that assessment.
"It's ironic that Google, who is always quick to defend its own trademark, would make such a move," he said.
McCaig also refuted Google's stance that this will improve services to those searching on Google. Citing figures from Hitwise, McCaig said that 93 percent of those searching for lastminute.com end up going through to the site, strongly indicating that they know precisely what they are searching for.
McCaig believes that this move is purely to drive inflation on the number of clicks on the search engine and will in fact cause more hinderance than good by allowing smaller companies to undermine the trademark larger firms have spent a lot of time and money building up.
Domain name management service NetNames has expressed concern that the move will lead to many brands being forced to incur losses on brand name clicks.
"In the same way that companies make defensive registration of domain names to ensure that their competitors do not purchase them and divert their traffic, they may now have to do the same for trademark keywords," said Jonathan Robinson, chief operating officer at NetNames.
Robinson is worried that the resulting competition for relevant keywords will cause the price to rise and that competitors will be able effectively to hijack a competitor's brand credentials and trademarks.
"The real impact of this change is that companies that have not previously invested in pay-per-click advertising will now be at a considerable disadvantage and may find themselves forced to invest in paid search simply to remain competitive," he said.
"One thing is clear: this is a move that will be viewed as controversial by many and will provoke much debate."
Google trademark move sparks outrage
By Staff Writers on May 7, 2008 7:40AM