Google Patents Location-Based Advertising

It looks like while half the Web will be holding its breath over how Facebook will wield its newly-found patent power, with its patent of the news feed, the other half just found a reason to take a big gulp of air and look around. Google was awarded last Tuesday a patent for location-based advertising, the potential bread and butter of a number of emerging mobile applications.

Kim-Mai Cutler at VentureBeat first discovered the patent, which it says “covers using location for targeting, setting a minimum price bid for an ad, offering performance analytics, and modifying the content of an ad.” Google filed for the patent in April 2004, several years before location based check-in services ever came into popular use.

Now, companies like Yelp, Foursquare, Gowalla and BrightKite have to be wondering what this means for them, as do some of the established big-time players, like Facebook and Apple.

Cutler points out this could be a cause for concern or it could just be a bargaining chip, like in a cold war, writing “it’s uncertain whether other start-ups should be alarmed by this. It’s standard for companies to file patents on technology they have developed as a defensive practice, rather than as a tool for pressuring other companies to desist or pay license fees.”

The patent, titled “Determining and/or using location information in an ad system“, gives a fully detailed description of what we would expect of any advertising network, from the basic idea of serving an advertisement according to a user’s location to analyzing resultant traffic and advertising success according to a number of factors.

Google further expanded its business in the direction of mobile advertising last November, when it bought the mobile advertising service AdMob for $750 million. We weren’t all that puzzled by the move then, but now it makes even more sense.

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