Google may be earning an alleged $500 million a year via companies and individuals who register deceptive website addresses.

The claim centers on a controversial scheme known as “typosquatting“, the practice of registering a misspelled variant of a popular web domain. For example, a typosquatter might register “evolvefuels.com” in the hope of getting visits from people who meant to type “evolvefuel.com”.

If that mistake is made frequently enough, the owner of evolvefuels.com can profit by placing ads on their page. They could, in particular, use Google’s advertising network which automatically assigns ads to a page based on its content, or using keywords provided by the page’s owner.

In that case, Google could get a cut too, and Tyler Moore and Benjamin Edelman at Harvard University have now estimated how much money this could bring in for Google.

Spelling slips
Moore and Edelman started by using common spelling mistakes to create a list of possible typo domains for the 3264 most popular .com websites, as determined by Alexa.com rankings. They estimate that each of the 3264 top sites is targeted by around 280 typo domains.

They then used software to crawl 285,000 of these 900,000-odd sites to determine what revenue the typo domains might be generating.

If the top 100,000 websites suffer the same typosquatting rate as the sites Moore and Edelman studied, up to 68 million people a day could visit a typo site, they say. They estimate that almost 60 per cent of typo sites could have adverts supplied by Google.

If the company earns as much per visitor from ads on typo sites as it reportedly does from ads alongside search results, it could potentially earn $497 million a year in revenue from typo domains, they conclude.

Google’s total 2009 revenues were $23 billion, 97 per cent of which came from advertising.

Removing ads
A Google spokesperson pointed out that the company will remove ads from typo domains if the owner of a site with a trademarked name makes a complaint, but declined to discuss the research in more detail.

Typo domains confuse consumers and can generate unnecessary costs for the owners of the targeted web domain, say Moore and Edelman. Companies can feel compelled to advertise on typo domains targeting their own websites because they fear they might lose business to competitors if they do not.

Edelman has criticized Google’s adverts appearing on typo domains in the past. He is currently co-counsel on a lawsuit from a firm seeking damages from Google after its adverts appeared on a typo domain targeting the claimant’s website. He says that his involvement in the suit did not influence the results of his research.

Court action
“I’m not doing it for the money,” Edelman says of the court action. “I’m doing it because it’s important.”

Moore and Edelman say their analysis found that some website owners operate thousands of different typo domains. They claim that this means Google and other ad networks would also be able to identify operators of such sites.

A paper on More and Edelman’s findings was presented last month at the Financial Cryptography and Data Security conference in Tenerife, Spain. An online appendix provides more information about the analysis.