That $500 million Google set aside for the DoJ? Relates to AdWords revenue from illicit 'net pharmacies

Remember that odd disclosure on a Google 10-Q form this week of $500 million (more than 20% of their bottom line) set aside for a possible settlement with the Department of Justice? The Wall Street Journal reports that Google "is close to settling a U.S. criminal investigation into allegations it made hundreds of millions of dollars by accepting ads from online pharmacies that break U.S. laws."


    1. So glad that at least ONE other person of my acquaintance is still asking that question.

      I’d like to know the answer too. But usually, I just get the same ol’. huh?… wha?

      1. It’s not necessarily bad to allow for-profit ventures, it’s just bad when they take over and re-write rules to suit their own ‘personal’ needs.

        Let’s say I want to fill a need for blueberry flavoured bagel schmear. I have 20 containers, charge $0.25 per container and all 20 sell. I increase my production and increase prices to $0.50. That was tasty, great, and I made a profit.

        If I notice that I’m selling less due to Pauls’ strawberry spread. Rather than improve my product, I fake a strawberry allergy and have the spread banned at the office. Because I manipulated the system, my sales pick up and I raise my prices to $0.50. Consequently, I’m a giant bag of poo-poo.

        For-profit, good (iff you aren’t also a prat).
        Being a prat, less good.

  1. So wait .. before you do business with someone, you need to make sure they aren’t engaging in illegal acts? If you’re a major search engine, apparently yes. That doesn’t seem right.

  2. Yes, it’s crazy isn’t it? A company that makes money advertising products and services should make sure that the products and services that they are advertising are not illegal.

    What’s the world coming to? BTW, whatever happened to the crack cocaine ads I used to see on TV? Or the hooker ads on Craigslist?

  3. Realmente no puedo creer lo que acabo de leer. Parecería que todos nos volvimos locos y el mundo está realmente cambiando

  4. I worked in Yahoo’s Search Marketing department for a few years, which is essentially the same thing as Google AdWords. Every advertiser who submitted ads selling products that could potentially be illegal according to U.S. laws — including porn, pharmaceuticals, weapons, etc. — was individually reviewed by an editor trained to look for any indication that something was amiss. It was official company policy that ALL sites selling prescription medications needed to be certified by the U.S. government. NO EXCEPTIONS. If you don’t have the official Seal of Approval, you’re nixed immediately.

    The WSJ story states, however: “Google said in February 2010 it would begin allowing ads only from U.S. pharmacies accredited by the National Association of Boards of Pharmacy and from online pharmacies in Canada that are accredited by the Canadian International Pharmacy Association.”

    “In February 2010″…?!? I worked at Yahoo in the early- to mid-2000s, and we knew the legal stakes back then, so clearly Google knew that allowing uncertified pharmacies was potentially illegal — and decided to go ahead anyway because there was so much money to be made. (Much like both Google and Yahoo have colluded with the Chinese government because they wanted access to the huge Chinese market, no matter what the cost.) One has to assume that Google believed that paying a huge penalty would be worth it due to all the $$$$$ they could make by skirting laws that are put in place to protect both American consumers and the American pharmaceutical industry.

    Weak, Google. So very weak … and so very typical.

    But on a more lighthearted related topic, as a Yahoo “red flag” editor, I DID get to see a lot of porn at work. Frankly, most of it is tedious and unsexy. Regardless of that, however, when people asked me what I did for a living, I could say, “Oh, I just look at a lot of online porn and drug websites all day. No big deal. Pass me a slice of pepperoni?”


  5. Half a billion profit to Google?
    That has to mean at least a few billion gross profit to dealers, meaning, probably, tens of billions gross.
    That sounds like a lot. Even over a few years.

  6. Give me a break, I mean the charge should go on the “Pharmaceutical companies” and them alone. Pharm Companies running “their” ads how “they” decided to make them doesn’t seem like it would be a GOOGLE issue to me. That’s my 2 cent’s anyway. This was a nice blog to stumble upon, found you guys at the bottom of a Forbes post – Cheers Xeni, well written!


    Jeremiah R.

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