Will Yahoo ban bids on trademarks?

Bloggers are reporting that Yahoo will no longer allow advertisers to bid for trademarked terms they don't own.

There have been several legal battles over the act of selling trademarked keywords. But despite the case history, no federal appeals court has addressed the issue, meaning the law is still unsettled.

Posters in the SearchEngineWatch Forums reported that they have received e-mails from Yahoo stating that the company "will no longer allow bidding on keywords containing competitor trademarks," starting March 1.

Bloggers speculated that Yahoo might be making the move to just get rid of the legal worries. problem. But they also pointed out that the company has been trying to lure big-name, mainstream advertisers, and this move might be a good way to convince them Internet advertising was a safe way to go.

Blog community response:

"While this move may not be surprising given Yahoo!'s past activities, will this move cause other engines to change their policies? How will this policy effect comparison sites which offer many brands on the landing page? Is Yahoo! trying to commoditize the search marketplace to help them make more money away from search?"
--Search Engine Optimization Blog

"An easy way to stop your big brand advertisers you've partnered with from being walked over this way is to ban 'comparison' ads linked to their campaigns."
--SearchEngineWatch

"Suddenly this gives them a differentiating point, allowing Yahoo's ad sales team to tell big companies that no competitive ads will appear on searches on their brand names. Of course, that should also drive down the competition on keyword prices on those terms, effectively hurting how much they can make on any advertising having to do with trademarked terms."
--Techdirt