E-Commerce Law

E-Commerce Law Briefs: Week of March 31, 2008

Surprise, surprise:  A recent article suggests that children are using social networking sites designed for adults.  "Research into internet use has found that, among children with internet access, more than a quarter of eight to 11-year-olds claimed to have a profile page on a social networking website. This is despite nominal age restrictions aimed at preventing pre-teens from using such sites."

(Link:  Adult social networking sites attract young users at guardian.co.uk)

Equally surprising is the suggestion that social networking sites don't generate large amounts of revenue when compared to other equally popular websites.  Fox Interactive, the Internet division of News Corp., may fall $100 million short on its $1 billion revenue forecast.  Social networking sites like MySpace and Facebook have tens of millions of users but generate relatively little revenue.  For example, the 80 million unique monthly visitors to MySpace generate well under $1 billion in revenue for News Corp. whereas Yahoo! has just over 50% more visitors and generates more than seven times the revenue.  Virtual communities don't generate substantial revenue, e-commerce sites that sell real-world products and services do (e.g., Amazon).

(Link:  News Corp. (NWS) Finds Out Social Networks Are Bad Business at 24/7 Wall St.)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

E-Commerce Law Briefs: Week of May 21, 2007

In response to complaints from universities, Google has decided not to accept advertisements from companies that sell essays or dissertations. "Google's forthcoming ban on adverts for ‘academic paper-writing services and the sale of pre-written essays, theses, and dissertations’ means that essay websites join a blacklist of ‘unacceptable content’ including adverts for weapons, prostitution, drugs, tobacco, fake documents and ‘miracle cures’."

(Link: Google bans essay writing adverts at BBC News)

More and more people are declaring "email bankruptcy." The volume of email traffic has nearly doubled in the last two years, resulting in an unmanageable number of inbox messages for many email users. Increasingly, overwhelmed folks are swearing off of email or deleting their inboxes and starting over.

(Link:  E-Mail Reply to All: 'Leave Me Alone' at washingtonpost.com)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  Google, email

E-Commerce Law Briefs: Week of March 5, 2007

"A handful of police departments have utilized YouTube as a law enforcement tool, putting up video of suspects and eliciting help from the Internet-using public in identifying them. Experts say the idea has promise, but it's too soon to tell whether it will have staying power amid constantly evolving technologies and the difficulty of making a video stand out among millions. Some also see a risk of fruitless tips, misidentifications or privacy problems."

These criticisms could just as easily apply to the broadcasting of surveillance camera video on the local evening news, a practice which is commonplace in many jurisdictions when police require community assistance to identify suspects. YouTube may reach a different audience but the concept is the same.

(Link: Police Turn to YouTube to Catch Suspects at washingtonpost.com)

Two independent sources estimate that U.S. consumers spent more than $33 billion online last quarter. Though online spending is still a fraction of total consumer spending, it is growing at a rate of more than 25 percent annually.

The e-commerce industry is growing at a substantial pace. As it does, law schools and firms must adapt to serve the unique legal needs of these clients.

(Link: New numbers show e-commerce spending tops $33 billion at Washington Business Journal)

Wikipedia plans to ask contributors who claim particular expertise on a subject to verify their credentials. The change in policy follows the discovery "that a high-ranking member of Wikipedia's bureaucracy used his cloak of anonymity to lie about being a professor of religion."

After his fraud was discovered, the contributor seemed to blame the whole incident on Wikipedia’s liberal concept of collaboration, which permits anyone to submit or edit site information. In an apology written to the Wikipedia community, he is quoted as saying: " ‘It was, quite honestly, my impression that it was well known that I was not who I claimed to be, and that in the absence of any confirmation, no respectible (sic) publication would print it.’ " 

This is yet another example of why courts should not rely on Wikipedia as authority for any disputed fact that is material to a case.

(Link: After flap, Wikipedia wants ID from self-proclaimed experts at SilliconValley.com)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  YouTube, Wikipedia

Wikipedia: Good Enough for Some Courts, Not Good Enough for Middlebury College

A small Vermont college has determined that Wikipedia is not sufficiently authoritative to be cited in papers by students.  According to a new policy instituted by the history department at Middlebury College, "Wikipedia is not an acceptable citation, even though it may lead one to a citable source."

Despite the reported reliance upon Wikipedia by some courts, it is difficult to accept that Wikipedia, in its present form, will ever be widely relied upon by courts on core issues or where there is conflicting evidence or authority.  Courts have recently demonstrated a willingness to consider and rely upon Internet resources, such as Mapquest, but Wikipedia is unique among those sites. 

The online encyclopedia is truly "collaborative" in that users are free to submit and edit information found on the site.  As a result, the accuracy and reliability of Wikipedia have been questioned. According to the site itself, it "has also been criticised for its susceptibility to vandalism, uneven quality, systemic bias and inconsistencies, and for favouring consensus over credentials in its editorial process."  In court, it would be foolish to rely on Wikipedia for any but the most mundane and uncontroversal facts.

Technorati Tags:  Wikipedia

Domain Name Business is Booming

Driven by the Internet advertising boom, CNNMoney.com reports that "the market for registering and trading domain names could reach $2.5 billion this year." The market’s growth is greatest in country-specific extensions, which do not suffer from the saturation apparent amongst dot-com domains.

For more information, see Staking a claim on domains beyond dot-com on CNNMoney.com.

Technorati Tags:  domain name

Surprise! Google Says Click Fraud Problem is Exaggerated

On the heels of reports that Google is joining Yahoo and MSN to address the click fraud problem, Google has released a report criticizing earlier attempts to quantify the problem as exaggerations.

According to this article in the Washington Post:

"Google said reports about click fraud have exaggerated the problem and could scare away advertisers. In its report yesterday, the company attacked the methodology used and conclusions drawn by click-fraud consultants, arguing they either lacked the technology to differentiate between a fraudulent click and a Web page reloading or that their technology improperly counted a single click as multiple clicks. Google cited specific examples of such methodological problems.

The reports ‘have led to vastly inflated estimates’ of the problem, said Shuman Ghosemajumder, Google's product manager of trust and safety. ‘We saw media reports and data from consultants submitted by advertisers and it didn't make any sense. This report details the flaws and explains the discrepancy. We want to help consulting firms.’"

As we’ve previously posted, declining advertiser confidence has forced the largest pay-per-click advertising companies (Google, Yahoo, and MSN) to finally address the click fraud problem. Google’s latest report is an attempt at damage control. Hopefully, it will lead to an honest appraisal of the problem and the granting of additional assurances to participating advertisers.

For more information, see Google Says About Click Fraud Are Overblown in the Washington Post and Google calls click fraud estimates overblown on CNET News.

Technorati Tags:  google, click fraud

Search Giants Join Forces to Fight Click Fraud

Earlier this week, E-Commerce Law informed readers of Google’s decision to disclose the number of clicks on each customer’s bill which are deemed to be invalid. At the end of that short post, we predicted that "[t]o remain competitive, Yahoo and MSN will have to follow suit."

Now, from an AP story on the website of WTOP News:

"The Internet's leading search engines [Google, Yahoo, and MSN] are teaming up with an advertising trade group to find a better way to identify and measure ‘click fraud,’ a scam that has raised doubts about the Web's trustworthiness as a marketing vehicle.

. . .

It may take more than a year before the guidelines are finalized, said Greg Stuart, chief executive of the Interactive Advertising Bureau.

The decision to develop the guidelines reflects the Internet industry's ‘commitment to being the most accountable advertising medium and providing marketers with the highest level of transparency,’ Stuart said."

Search giants Google, Yahoo, and MSN really had no choice but to join forces to address the issue of click fraud, as consumer confidence in the accuracy of Internet advertising charges plummets as a result of publicized court cases and industry reports quantifying the problem. Though the teaming of these search engines to address the click fraud problem may result in systematic improvements, it’s impossible to eliminate the problem altogether.

For more information, see Web Search Engines to Fight Click Fraud on wtopnews.com.

Update (8/2/2006):  Here's the washngtonpost.com version of the article:  Web Search Engines to Fight Click Fraud.

Technorati Tags:  google, click fraud

Google to Disclose Number of Fraudulent Clicks

In April, E-Commerce Law argued that to maintain the confidence of advertisers the search engine giants would have to assist in quantifying and reducing the click fraud problem. Now, Google has taken a first step in this process by agreeing to disclose the number of clicks on each customer’s bill which are deemed to be invalid.

To remain competitive, Yahoo and MSN will have to follow suit.

For more information, see Google to Disclose Dishonest Ad Clicks on nytimes.com.

Technorati Tags:  google, click fraud

Congress vs. MySpace

Last month, this site pointed out the possibility that the increasing number of school bans of MySpace might expand to other public access points, such as libraries. Now, Congress is considering a bill that would require most schools and libraries to make social networking sites inaccessible to minors.

According to CNET News, the Deleting Online Predators Act (DOPA)

"would cordon off access to commercial Web sites that let users create public "Web pages or profiles" and also offer a discussion board, chat room, or e-mail service.

That's a broad category that covers far more than social-networking sites such as Friendster and Google's Orkut.com. It would also sweep in a wide range of interactive Web sites and services, including Blogger.com, AOL and Yahoo's instant-messaging features, and Microsoft's Xbox 360, which permits in-game chat.

[The bill] is part of a new, poll-driven effort by Republicans to address topics that they view as important to suburban voters."

As previously posted on this site, MySpace’s reputation is the primary obstacle to its financial success. It’s certainly not a good sign that the site has now become a political rallying point.

For more information, see Congress targets social network sites on CNET News.

Update (5/11/2006):  MySpace bill prompts blogger backlash on Blogma.

Update (5/22/2006):  Legislation: Schools, Libraries No Place for Internet 'Friends' to Meet on E-Commerce Times and The slippery slope has slipped - new legislation to block more MySpace et al at libraries and schools on LibraryLaw Blog.

Technorati Tags:  myspace, congress, deleting online predators act

Amazon Dumps Google for MSN

From CNET News:

"As Google continues its expansion away from pure search, it's starting to see a reaction from other Internet companies. Online retailer Amazon, for one, has switched search partners from Google to Microsoft. Amazon's Alexa search toolbar and A9 search engine now get results from MSN Live instead of Google."

Among users, Google is the most popular Internet search engine, followed by Yahoo and MSN. Its user popularity has translated directly into advertising revenue, as Google captures forty-nine percent of all search-related advertising business.

Now, MSN and Yahoo are mounting offensives designed to narrow the gap between the industry leaders. The partnership with Amazon is just one part of MSN’s immediate plan to increase its search-related revenue.

Early this month, MSN is expected to debut its first search-advertising network, adCenter, leveraging its unparalleled database of user information to place online advertisements which are contextually related to both user-input keywords and demographic information about the user.

As reported on BusinessWeek online:

"More than 250 million users have provided Microsoft some level of personal info, such as gender, age, and Zip Code, when signing up for various MSN services, such as a Hotmail account. Microsoft will lay this demographic data on top of contextual ad matches with the hope of providing a radically improved result. Microsoft insists that no personally identifiable info will be disclosed.

Instead of simply bidding on words and phrases, MSN is betting that some advertisers will offer a larger payment if the Web surfer falls inside its target audience. For instance, Kentucky Fried Chicken . . . could target women between 35 and 45 at dinnertime with hopes they'll opt to buy a bucket of thighs and breasts instead of cooking. Or Neutrogena Corp. . . . could target one set of ads for its facial cleansers for men and another for women."

Applying demographic matrices to keyword search results increases the likelihood that a user will actually view and respond positively to a specific advertisement. In essence, it helps display advertisements that are appealing to the specific user.

MSN could really benefit from additional partnerships with other e-commerce businesses that keep customer preference and activity information, like Tivo and Netflix. A search engine with access to a user’s basic demographic information and the user’s purchasing, television, and movie preferences would be a powerful provider of relevant advertising and tailored search results.

For more information on MSN’s partnership with Amazon, see Amazon switches search partners on CNET News.

For more information about the efforts of MSN and Yahoo to close the gap between the Internet search leaders, see The Counterattack On Google on BusinessWeek online.

Update (5/2/2006):  See the Washington Post article:  Amazon Search Finds Microsoft.

Update (5/5/2006):  Ballmer Boasts of Search Engine Progress on washingtonpost.com.

Technorati Tags:  google, yahoo, msn, microsoft