Google Settles AdWords Suit

Pays Up to $20 Million in Cash/Ad Credits

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AdWordsAll the way back in 2005, Minnesota Printing company CLRB Hanson Industries and New Jersey native Howard Stern (no, not the radio host) filed a suit against Google on the grounds that the company was overcharging them and serving more ads than they were supposed to. Google said that these claims were unfounded.

The lawsuit stemmed from a dispute about the meaning of "daily budget" in Google’s AdWords contract with search marketers.

According to Google, they only charged up to 120% of marketers’ budgets to make up for days when ads were under-delivered. Either way, the company decided to settle and put the whole thing to bed. Google agreed to pay up to $20 million in the class-action suit.

MediaPost quotes a Google spokesperson who says, "Google believes the claims are without merit, but we are pleased to have the litigation behind us and to move forward with our business objectives."

They’re not exactly shelling it all out in cash though. Stern and CLRB Hanson Industries will get $20,000 a piece, but everyone else in the suit will receive AdWords ad credits. The plaintiffs’ lawyers are making out better than anyone with $5 million.

I don’t think the settlement is going to break Google’s bank. Of couse they did recently lay off 200 employees.

Google Settles AdWords Suit
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  • mpheadley

    I did adwords for 3-6 months at least when I started a business and got absolutely nothing out of it even though I was receiving hits like crazy.

    I basically understood how it worked, that there was competition in that the highest bidders received the most prominent placement. But I’ve always questioned that bidding because I would always get different results with each search for the exact same thing. Google managed to make a wonderful concept excrutiatingly confusing and frustrating. Typical corporate actions!

    However, for that nothing, I am now receiving responses through general searches for my type of business through regular old google.

    So it may take adwords to get you started and on the map, but I wouldn’t keep paying for something completely incomprehensible and ineffective beyond a few months.

  • http://www.goldendoodleworld.com Goldendoodle World

    We did google ad words and got ripped off. Basically our competition would use up our daily budget by clicking even though they weren’t looking. We found out about this through others having the same problem. I don’t know how far back credits are suppose to be given to customers but I doubt we’ll see one!

  • Guest

    I also did adwords for 4 months when started a business and got nothing out of. From 4000 clicks, no even 1 sold item!
    For that nothing, finally I closed account and now receiving responses through generic searches for my website through regular search. I think it is completely ineffective for cost.

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