Whether it breaks the core functionality of the Internet or not, there’s very few ISPs left who aren’t using DNS redirection advertising. The “service” essentially creates an entirely new revenue stream for ISPs, by presenting users with an ad-laden search portal instead of the traditional page not found error when they mistype a URL or enter a non-existent one. Given the money being made by ISPs and operations like OpenDNS, it makes sense that Google today announced they’re jumping into this arena with Google Public DNS.

Like ISPs, Google argues they’re providing an improved “experience,” not simply trying to cash in on clumsy typists:

The average Internet user ends up performing hundreds of DNS lookups each day, and some complex pages require multiple DNS lookups before they start loading. This can slow down the browsing experience. Our research has shown that speed matters to Internet users, so over the past several months our engineers have been working to make improvements to our public DNS resolver to make users’ web-surfing experiences faster, safer and more reliable.

At launch Google says they won’t be utilizing behavioral ad redirection, but given Google’s an ad company – it seems unlikely things will stay that way. Google’s initial sales pitch for the service is about performance, privacy, and general network altruism. Google’s also initially promising not to use the data collected for profit. Ultimately though, the idea they’ll leave billions in user tracking and behavioral ad revenue untouched as the project evolves – seems unlikely. More likely is that, unlike ISPs, Google wants to make a valuable consumer DNS service first – and then prop the project up with revenue at a later date.

For broader context, total DNS server meltdowns used to be a regular occurrence for even the biggest ISP a few years back. Each outage acted as an advertisement for OpenDNS, an operation that’s since become very popular among our users. OpenDNS handles 20 million DNS requests a day, has 15 million users, and generates (as of 2008) $20,000 per day off of ads presented after URL errors.

What keeps customers onboard? OpenDNS offers users a slew of network management options, anti-phishing protection, website filters, and (depending on the DNS servers you were using) a faster browsing experience. As ISPs discovered that OpenDNS was eroding a possible revenue stream (redirection portal ads) and doing a better job at running DNS servers then they were, many ISPs rushed to offer DNS redirection systems of their own – with various degrees of success. < Most ISPs were so blinded by the cash, they implemented the service without adding value, tools, or even informing users. A number of ISPs didn't bother to make sure the "opt out" process worked (cough, Embarq) and others didn’t offer “clean” DNS servers for users who didn’t want to participate. When Earthlink was among the first ISPs to use DNS redirection back in 2006, they mistakenly brushed aside the concerns of “ISP geeks” entirely. DSL Extreme had to scrap their system after user complaints.

More recently, we’re starting to see ISPs smarten up and realize that it’s about more than just making a buck off of mistyped URLs. ISPs are now competing with third party DNS operations. Comcast has interestingly been one of the smarter ISPs on this front, implementing DNS redirection, but also offering users value in terms of a new DNS health portal, clean DNS servers and a functional opt-out process — all documented transparently via the RFC process and with an ongoing conversation with our users.

Google of course belatedly wants to hone in this evolving DNS market, just as they do every other ad market. Google’s entry is a warning shot to ISPs who still haven’t beefed up their DNS servers — or those ISPs that are using DNS redirection but doing a crappy job of it. ISPs should have already figured out that offering great DNS servers and useful DNS tools is now a competitive differentiator. With Google’s entry, ISPs who haven’t should be getting a wake up call shortly.

As for OpenDNS, founder David Ulevitch shares his thoughts on Google’s launch over at OpenDNS. Not too surprisingly, he tries to downplay Google’s move as a threat to OpenDNS, even though the threat is undeniable. It’s not clear what else you can say when the Internet’s most powerful company aims its cannons directly at a niche you’ve been quietly cultivating for half a decade. Honestly, it’s a little surprising it took Google this long to identify that the niche is worth targeting.

Users interested in using Google’s new DNS system can head here for instructions and technical specifics.

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[ Related: Introducing Google Public DNS ]