Google Adwords, Overture, and lots of lawyers. As usual.

An interesting snippet has come to light in the “risks” section of the Google IPO prospectus:

“Overture Services (now owned by Yahoo) has sued the Company, claiming that the Google AdWords program infringes certain claims of an Overture Services patent. It also claims that the patent relates to an Overture Services own bid-for-ad placement business model and its pay-for-performance technologies. The Company is currently litigating this case. If Overture Services wins, it may significantly limit the Company’s ability to use the AdWords program, and the Company also may be required to pay damages.”

If you’re planning your future revenue stream around AdWords (and, by extension, Adsense), you might want to keep an eye on this particular lawsuit. Or, better yet, spread your bets by diversifying your revenues.

After all, I can still remember having a young entrepreneur come up to me after I presented a workshop at a Web Marketing conference in 1999 asking if I’d read his business plan. I didn’t accept it, instead I asked “what’s your primary revenue stream?”. When he answered “banner ads” I said “you need to rethink your plan.” Good long-term business strategies are all about balancing risk and opportunity. Google knows that. Do its advertisers?

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