Summary of Issue
Excite engages in the practice of selling, not just advertising space, but also search terms which, when used as part of an ordinary search, trigger the display of ads. The legal issue comes by way of the fact that the search terms sold need not correspond with the advertisers. In the first claim brought against such a practice, Estee Lauder has sued Excite for selling the search term keywords "Estee Lauder" and "Origins" to one of Estee Lauder's competitors, namely Fragrance Counter. When you conduct a search on Excite with any combination of search terms that include "Estee Lauder", the results list is preceded by a large ad for Fragrance Counter. Estee Lauder's claims are based on, among other things, trademark infringement and unfair competition. Playboy has also filed a very similar suit against Excite.
To see how this works, go to Excite and do a search using any combination of terms which includes the terms "Estee Lauder". Notice the ad which appears at the top and bottom of the results list.
Then check out this article
discussing the Estee Lauder suit, and if you have time, this article
discussing both the Playboy and Estee Lauder suits against Excite.