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Google reverses stance, will verify pharmacy ads

By Monica Soto Ouchi
Seattle Times technology reporter

	Peter Neupert
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In an apparent reversal, Google yesterday said it would hire a third-party company to verify online pharmacies before allowing them to advertise on its site.

Bellevue-based drugstore.com last month publicly challenged Google and other Internet search engines to accept paid advertisements only from online pharmacies verified by the National Association of Boards of Pharmacy (NABP).

	Larry Page

Mountain View, Calif.-based Google, considered one of the most successful Internet companies, has not said what third-party company it plans to use, but its response yesterday differed starkly from one it gave a month ago.

In an Oct. 31 interview with The Wall Street Journal, Google co-founder Larry Page called drugstore's request "highly commercially motivated," charging the online pharmacy with trying to remove ads for low-cost competitors.

Google's policy then was to accept ads from online pharmacies that required a prescription, but that definition included questionable Internet pharmacies that would administer an online prescription without a physical consultation. Many of these businesses are run out of storefronts.

Drugstore Chairman Peter Neupert said Google's acknowledgement of the problem is a "great first step" in making the Internet a safer place to purchase prescriptions.

"I applaud the fact that Google is changing their policy after being the ones dragging their feet the most," he said. "I haven't seen the terms of what third party they're going to use or what criteria they're going to use, so I have to reserve judgment."

Yahoo! last month said it planned to hire a third-party source to verify the legitimacy of online pharmacies that want to advertise on its site. America Online had already accepted advertisements solely from online pharmacies verified by NABP's Verified Internet Pharmacy Practice Sites program — the program advocated by drugstore.com.

The search engines' varied responses are evident by conducting searches on their sites. Type painkiller Vicodin into the Yahoo! search engine and the sponsored results returned two links yesterday — both to Vicodin addiction-treatment programs. AOL and MSN carry no paid advertisements.

In contrast, a Google search returned eight paid advertisements, the highest link for an online pharmacy that says "online doctors provide prescription" — a practice that is not illegal in all states, but is frowned upon by national oversight boards.

Forrester Research analyst Elizabeth Boehm said a bit of industry peer pressure might have put Google on the same track. "This looks to me like an industry attempt to avoid regulation," she said. "If you self-regulate adequately, then there's not need for the government to implement its version of regulation."

In the past year, paid search has emerged as an important source of revenue for the online-advertising industry as companies have opted to bid for the right to be associated with specific keywords.

When an Internet user types a keyword into a search engine, the results are accompanied by sponsored links along the right-hand side of the page.

Paid searches, however, have produced what many consider a troublesome side effect for the online-pharmacy industry. Rogue Internet pharmacies — those that either allow customers to receive a doctor's prescription online without a physical consultation, or don't require a prescription at all — have aggressively bid for preferred placement on Internet search engines, essentially pricing legitimate competitors out of the game.

Forrester's Boehm said Google's move won't bar access to illegitimate pharmacies. But it would drive down advertising costs for legitimate pharmacies.

Drugstore — one of the many legitimate online pharmacies that opted not to bid for certain lifestyle-drug keywords largely dominated by rogue competitors — said it hasn't decided whether it will begin buying paid searches once the cost comes down.

Monica Soto Ouchi: 206-515-5632

Copyright © 2003 The Seattle Times Company