Pasadena-based Overture, formerly known as GoTo, found success
before Google with its advertising model. Its advertisers bid for
placement on relevant search results and pay Overture only when
someone clicks on their listing.
The company was awarded a US patent in July 2001 which covers a
"system and method for influencing a position on a search result
list generated by a computer network search engine." It sued Google
for infringement in April 2002 over its AdWords service.
AdWords, launched in February 2002, also allows advertisers to
sponsor particular search terms so that, for a fee, whenever that
term is searched the advertiser's link will appear next to the
search results. Google has always denied infringement.
According to SiliconValley.com, the first stage of the court
process is well under way, with District Court Judge Jeffrey White
likely to issue a crucial technical ruling any day now to determine
the extent and definition of the patent claims with a view to
determining whether there may have been an infringement. It is
therefore fundamental to the case.
If Google loses, according to SiliconValley.com, it may face
paying hundreds of millions of dollars in compensation to arch
rival Yahoo! If it wins, Yahoo!, a shareholder in Google, still has
Google's flotation to look forward to later in the year.
