A federal court judge in California dismissed Kinderstart’s lawsuit against Google over what it called “pervasive monopolistic practices” in the search king’s ranking of search results, but left the door open for the early-child-rearing information site to resubmit its complaints.

Judge Jeremy Fogel of the U.S. District Court for the Northern District of California in San Jose agreed Thursday with Google’s motion to dismiss the complaints, which alleged that Google had violated free speech and antitrust laws.

Kinderstart filed the suit in March, saying it noticed a 70 percent drop-off in its traffic after Google downgraded the Norwalk, Connecticut-based company’s web site to a zero search ranking in its PageRank toolbar (see Google Sued over Ranking).

The company also experienced an 80 percent plunge in revenue from ads in Google’s AdSense program.

The case raises potentially far-reaching issues about the still-young area of Internet search. If successful the suit could have a significant impact on the way Google and other search engines present results. In turn, that could affect revenue generated by such companies.

Judge Fogel dismissed the nine counts in Kinderstart’s complaint saying they were too vague and insufficient to support the allegations, but did not dismiss them “with prejudice,” giving Kinderstart the ability to refile or amend the complaints. Kinderstart plans to do so and also plans to seek class-action status for the lawsuit. The next court date is set for September 29.

“We are pleased that Judge Fogel dismissed all of Kinderstart’s claims,” Michael Kwun, Google’s senior litigation counsel, said in a statement.

Despite the ruling, Google shares dropped $0.39 to $408.44 in recent trading.

Plans to Refile Complaint

Kinderstart founder Victor Goodman was pleased that the judge is allowing his company to resubmit the case.

“I would have liked a few of the counts to stand this time, but we had figured that some counts would stand, some of them would be thrown out, and a few would be held over for the resubmission,” he said.

“As it turned out, it looks like he let us resubmit everything,” he added. “He didn’t say we were wrong about anything. He said, ‘I need more facts. It needs to be prepared more. These are major charges.’”

Mr. Goodman plans to talk to other members of the Kinderstart team, and try to determine where to go from here. But he remains adamant in his opposition about Google’s practices.

“Our belief about Google is that they’re blocking free speech,” said Mr. Goodman. “We need to make people aware of that. They admitted it in court.”

Mr. Goodman said that Google’s attorneys told the court the company had the ability to manipulate the rankings for various sites. “[Google attorney David] Kramer said it’s their opinion, it’s not based on any logarithm,” said Mr. Goodman. “They can put any site anywhere they want, including downgrading competitors. Most people don’t know that. You are where you are because it’s their decision. There’s no magical logarithm.”

He hopes to bring in more companies to join in a class action lawsuit against Google if he can get the lawsuit certified as a class. His research has found a great deal of discussion amongst other sites whose traffic dropped off dramatically after Google changed their page rankings. Mr. Goodman also contends that the levels of click fraud far exceed Google’s own estimates.

Contact the writer:MCohn@RedHerring.com