For those who remember the buyout of Be Free by ValueClick in 2002 will remember that the total cost of that transaction was in excess of $100 million dollars. The oddest thing was that shortly after that purchase, ValueClick shutdown Be Free and moved all clients over to Commission Junction, their other affiliate marketing platform. So why pay $100 million and then close the shop? It probably has something to do with the fact that the real value of Be Free was not its affiliate platform but the two behavioral targeting patents that it holds.
One patent at issue, the 1998 “Method and Apparatus for Determining Behavioral Profile of a Computer User,” involves creating psychographic profiles of Web users “by recording computer activity and viewing habits.” The second, “Computer Program Apparatus for Determining Behavioral Profile of a Computer User,” issued in 1999, likewise deals with creating behavioral profiles of Web users. Both patents list Thomas Gerace as the inventor. Gerace founded Freedom of Information, Inc., which later became BeFree, Inc. and was acquired by ValueClick for $120 million in 2002. Gerace also is the founder and chief executive of the social networking site Gather.com.
Google surely knows of these ValueClick lawsuits. Now that Google is testing the behavioral targeting waters, they probably have their legal team waiting in preparation for more lawsuits to come through the door. Either that or Google has an out and have found a way around the infringement of ValueClick’s patents. Google is calling it “interest-based” with no mention of the term “behavioral targeting”. Here are two references to this new Google offering:
- Google sidles up to behavorial targeting
- Google will let people choose how its ads target them
For a while after AOL purchased Tacoda, an industry leader in behavioral targeting, it looked like ad serving based on user action was being phased out of existence. It’s good to see behavioral targeting come back to life. I am sure ValueClick lawyers are going to have a field day with Google’s latest offering.