Google allows firms to buy rival AdWords

Google is to change the rules of its Adwords online advertising scheme, allowing firms to register other companies' brand names as keywords - even those of competitors.

The move was announced at a press conference today in Paris, and follows a decision in the European Court of Justice in March that ruled that Google hadn't broken European trademark laws by selling protected words to rivals of luxury goods brand Louis Vuitton Moet Hennessy (LVMH).

The result of the rule change is that a search for "iPhone", as well as bringing up ads from the handset's maker Apple, could yield results from third-party iPhone sellers, or adverts for rival devices such as RIM's BlackBerry or Android-based smartphones.

The decision would also allow retailers to buy keywords specifying the exact brands of items they sell.

"This is beneficial to users," Google spokesman Ben Novick told journalists at the press conference. "They'll see more relevant ads when they've done a search."

What Novick didn't say - but which seems a more likely motive behind the move - is that by broadening the scope of the keywords on offer to potential advertisers, Google can look forward to a healthy boost in its revenues.

Under Google's current system, companies can prevent competitors from buying trademarked search terms in order to place competing ads.

Google set out the new rules, which come into force on 14 September in the UK, Ireland and Canada, in a post on its AdWords blog. Similar rules are being adopted across the rest of the EU.