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Harvard Business School professor Benjamin Edelman believes Google is profiting from and encouraging typosquatting by placing ads on trademark infringing made-for-AdSense websites. As co-counsel in a class action suit, Edelman suggests Google could be making money from a million domains or more.

Typosquatting is the practice of registering a domain that is an errant version of a popular website in order to gain traffic and ad clicks from people who misspell or mistype their intended domain. For example, one might type bankofamrica.com instead of bankofamerica.com. Typosquatting has been illegal in the States since 1999, and is considered trademark infringement in most countries.

In a recent report for McAfee, Edelman said more than 80,000 typosquatting domains for the top 2,000 websites, and singled out Google as the largest ad network contributing to the viability of these sites.

“The largest network in this space is Google, whose AdSense for Domains product and other domain-syndication products serve ads on more than 80 percent of the typosquatting sites recently uncovered by
SiteAdvisor technology,” Edelman wrote.

In that same report, freecreditreport.com was the most targeted, with 742 typosquatting domains registered, followed by cartoonnetwork.com (kids’ sites are often targeted) with 327, youtube.com with 320, craigslist.org with 318, and Google’s own blogspot.com with 276.

In an article for The Harvard Crimson, Edelman low-ball estimated a million sites earning $25 per year for the owners, meaning Google was likely charging between $32-$50, equaling at least $32 million annual gross for Google. Edelman believes it could be more (it could also be less, though).

Because of the range of companies indicated with possible trademark infringement cases, the suit has been filed as a class action. “We believe class action adjudication is the most efficient way to resolve these companies’ complaints,” Edelman said in The Crimson. “It would be unreasonably complicated, costly, and time-consuming for all trademark holders to sue separately.”

If Google were to abandon the typosquatting industry, he argues, it could be far less of a problem. In a standard statement to the press, Google has said the lawsuit’s claims are “baseless” and that the company would fight the suit vigorously.

If all true, it’s interesting Google would be so lax in dealing with typosquatting domainers. For all the company’s noble efforts to fight other shady practices like malware—most definitely a concern with squatters—various link spam techniques (and paid links certainly), and deceptive marketing tactics, aiding and profiting from typosquatting would be a definite stain on the company’s overall reputation.