Rackspace Warns Rivals on AdWords Ads

PC Pro is reporting that Rackspace has sent letters to other hosting companies about the use of "rackspace" as a keyword for advertising campaigns on Google AdWords. The warnings were sent only to competitors believed to be buying the one-word keyword "rackspace" and not the generic two-word phrase "rack space."A Google search on Rackspace currently returns a page with the right-hand column filled with ads from rival hosting companies, several of which don't show up on a search for "rack space."

A Rackspace spokesman told PC Pro the company "wasn't trying to be heavy handed." "Rackspace is a registered trade mark which we own, and they have certain legal protections," he said. "The reason we have a registered trade mark is to protect the name. We've spent a lot of time and money building the brand up."

AdWords bidding on competitor's trademarks has been a controversial topic for years. Google initially tried to prohibit the practice, but in early 2007 altered its policy to allow bids on trademarked terms, while establishing a formal process for trademark holders to challenge potentially infringing keyword bidding. Earlier this year that policy was extended to the UK as well as the US. Some companies, including the maker of Rosetta Stone language software, have filed suit to halt "piggybacking" - advertisers use the trademarked words of big brands to divert prospects.

The warnings from Rackspace appear to have preceded last night's outage at the company's Dallas data center. Hosting companies will frequently use AdWords to purchase keywords related to the brands of competitors that have suffered downtime.