Suppose I own well known, branda.com - then I decide to corner the market, I white label my site, and call it brandb.com.

Perhaps I'm dense, but is this OK to do on Adwords, or is it something that Google discourages?

Afaik, this isn't OK, but this morning I noticed that the whois / dns server / etc match for "brandx.com" and this other site - brandz.com, which are also both bidding on many of the same keywords...if this is what it takes to compete, and Google is OK with it, should I do it? I know I can get a good ROI if I do the same, I'm just thinking this isn't the way it's supposed to work...

I believe that Google is more lenient on this subject than the other giant Overture. Meaning if you use only the very main keywords for both accounts, but have a difference between the specificity and number of your keywords between both websites, then Adwords would not raise any questions in the same way that they would if you had two identitcal "mirror" Adwords accounts.

For example Johnson and Johnson could pull off using a few of the same keywords for the Tear-Free shampoo that we remember from our childhood and their new brand Free-Tear Scented shampoo.

What I think, you're fine branding 2 different sites on Adwords as long as you do so in moderation...

Of course, I can only assume that Google would take action on any attempt at creating an obvious monopoly, i.e. boxing out competitors by placing high bids with good creatives for Brands A, B, C, and D.

Suppose I own well known, branda.com - then I decide to corner the market, I white label my site, and call it brandb.com.

Perhaps I'm dense, but is this OK to do on Adwords, or is it something that Google discourages?
This question is really difficult to answer in this Forum, because the answer lies in the exact details of the individual situation.

Perhaps I can be most helpful by providing an insight into the spirit behind the policies related to the question. It is really pretty simple:

It is a strongly held belief here at AdWords that one advertiser should occupy only one spot in the AdWords results for a given keyword.

It's as simple as that.

An effort to occupy more that one spot for a given keyword would, on the face of it, seem counter to the spirit of the policy. With that said, for those who feel that their situation calls for an exception to this policy, those situations are addressed on a case-by-case basis, taking into account the specific details at play.

Hope that helps a bit.

AWA