Regular readers of this site would be familiar with the ongoing legal battles involving the practice of typosquatting; the registration of misspelled domain names of well know brands with the intention of making a profit. Taking advantage of the fact that millions of online users mistype addresses of websites they intend to visit, typosquatters register common misspelled versions of popular sites and make money by displaying ads. Google’s AdSense for Domains (AFD) program, often used for displaying such ads, has been particularly targeted by trademark owners which according to McAfee’s SiteAdvisor, serves ads on more than 80% of typosquatting sites recently uncovered.

A report by Harvard University professor Ben Edelman, published in the McAfee Security Journal [PDF], suggests there are more than 80,000 domains typosquatting on just the top 2,000 web sites such as MySpace, Facebook and Craigslist.

David Kravets of Wired reports that “Edelman and other lawyers have filed a class action lawsuit representing domain owners who claim the Google Adsense for Domains (AFD) program is assisting in violating trademarks. A hearing is scheduled for as early as next month in which Edelman will ask an Illinois federal judge to allow the case against Google to proceed.”

Also noteworthy from McAfee’s Security Journal are Edelman’s following remarks:

“[P]ersistent rumors suggest top ad networks, particularly Google, may abandon the typosquatting industry. Recent trademark holder class-action litigation has challenged Google’s role in funding the typosquatting industry, and these typosquatting placements have been a repeated source of advertiser and trademark holder complaints. If Google ceased funding typosquatting, typosquatters would have far less incentive to register infringing domains; no other ad network is likely to pay typosquatters as much as Google does.”

Alex Tajirian, CEO of DomainMar and a former professor of finance and economics says: “Given that Google is smart, they are moving towards cleaning up their act not because of legal pressure, but because improving user experience strengthens brand (and thus, shareholder value) and diminishes the incentives of third-party vendors, say, plug-ins or new browsers, to find technology-based solutions to improve user experience that would reduce the time spent on Google’s sites.”