Google cut off Megaupload's ad money voluntarily back in 2007

The federal government's 72-page indictment of file hosting site Megaupload is stuffed with odd bits of information. Take page 34, for instance, which features a single paragraph about Google's AdSense program. It reads:

On or about May 17, 2007, a representative from Google AdSense, an Internet advertising company, send an e-mail to [Megaupload founder Kim] DOTCOM entitled "Google AdSense Account Status.” In the e-mail, the representative stated that “[d]uring our most recent review of your site,” Google AdSense specialists found “numerous pages” with links to, among other things, “copyrighted content,” and therefore Google AdSense “will no longer be able to work with you.” The e-mail contains links to specific examples of offending content located on Megaupload.com. DOTCOM and his conspirators have continued to operate and financially profit from the Megaupload.com website after receiving this notice.

Sometime later, Megaupload launched an internal advertising agency so that it collect even higher amounts of cash from placing ads on its download pages.

But the paragraph is more interesting for what it tells us about Google. Policy wonks may remember that the company has been absolutely vilified in recent months for taking advertising money from pirates, counterfeiters, and other unsavory characters. The implication—and sometimes it's far more than an implication—is that Google opposed recent legislation like the Stop Online Piracy Act (SOPA) only because it couldn't pass up the sweet nectar of forbidden cash.

Dirty pirates

Such criticism doesn't come simply from copyright holders; it goes all the way to the top. At a remarkably one-sided anti-Google hearing on SOPA last year, the chairman of the House Judiciary Committee eviscerated Google in his opening statement, contrasting it with “responsible companies." Take it away, Lamar Smith (R-TX):

Another one of the companies represented here today has sought to obstruct the Committee’s consideration of bipartisan legislation. Perhaps this should come as no surprise given that Google just settled a federal criminal investigation into the company’s active promotion of rogue websites that pushed illegal prescription and counterfeit drugs on American consumers....

The company also disregarded requests to block advertisements from rogue pharmacies, screen such sites from searches and provide warnings about buying drugs over the Internet... Given Google’s record, their objection to authorizing a court to order a search engine to not steer consumers to foreign rogue sites is more easily understood.

Hollywood has been beating the same drum ever since. The Directors Guild of America, the Teamsters, and others authored a recent letter supporting SOPA. In it, they wrote:

We are well aware that opposition voices, funded and encouraged by a few enormous Internet companies like Google that stand to lose billions in illicit profit (as shown by Google’s willingness to pay a $500 million fine for knowingly placing ads on illegal pharmaceutical sites), if the bills are allowed to become law, have grown louder and shriller in an effort to sway public opinion and derail the political process. They have successfully diverted support from the bills by blanketing the Internet with mistruths and lies and using fear tactics and blacklists to overwhelm and intimidate those who should stand up for protecting American creativity and American workers.

Just yesterday, MPAA boss Chris Dodd talked about how "hurt" he was about SOPA criticism in an interview with the Hollywood Reporter. But it wasn't long before he was taking whacks at Google's finances.

Obviously what happened is those—particularly Google—who are opposed to the legislation, they don’t want [the law] to happen because [search related to piracy is] a major revenue raiser for them, not because of freedom of speech or breaking the Internet. They make a lot of money off that and I understand they don’t want to be hurt economically.

Google responds

Google policy counsel Katherine Oyama tried to fight back against this perception at the hearing, saying that Google spent more than $60 million in 2010 alone to police bad ads, and that the company voluntarily took action against 12,000 sites in 2010 and another 12,000 in 2011 for violating its ad policies on infringement.

The Megaupload indictment appears to show that Google proactively took measures against the site as far back as 2007—even though the account must have been generating quite a bit of money. (While most of the $175 million in alleged Megaupload revenues came from subscriptions, $25 million came from ads.)

This isn't to say that Google is some sainted company. Critics rightly point to the fact that it agreed to forfeit $500 million to the government over advertising it accepted for illicit online pharmacies. It ditched its hardcore net neutrality allies to do a deal with Verizon. And its "don't be evil" motto has been violated time and time and time again.

But some of the criticism has turned into Google Derangement Syndrome; as the government's own indictment shows, Google has for years made (yes, sometimes inconsistent) efforts to address infringement and counterfeiting using its ad programs. Trying to pretend that this debate is solely about Google's piratical cash hoard, or that Google is the only entity that opposed SOPA, is exactly the kind of hyperbole that SOPA backers now say they want SOPA opponents to abandon.