MediaPost reports that Amazon.com purchased a keyword for a desktop toy “buckyball” and the ad (when clicked) took the consumer to Amazon’s site advertising competing products for sale (and not actually buckyballs).

This is a great example of a teaching case for your search staff managing your campaigns (be it in-house staff or an agency). This legal gray-area should be steered clear from at all costs. There’s no value in executing a paid search campaign that purchases trademarked competitor names. The risk of a law suit out weighs any potential short term gains. Plus, you will most likely get a low conversion rate and high CTR which is death and doom in the paid search world. Give consumers what they want and don’t confuse or mislead them. This will keep your search costs down, conversions up and the “internet at peace with one another”.

Here’s the report from MediaPost: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=152000&nid=127678#