Not long after Google settled a click fraud lawsuit, Yahoo is finding itself charged with click fraud. This is different, though; it looks like spyware is involved, along with some very questionable practices. Keep reading to find out more about the charges...and the evidence.
If you advertise your website with the search engines, you're probably paying a premium price. For that fee, you expect to see a traffic stream that is likely to deliver a higher-than-average percentage of conversions, because these are people that are actually looking for exactly the kind of goods, services, or information you can provide. If you don't, you may suspect that something is wrong. According to a lawsuit filed last week against Yahoo, your suspicions may be more accurate than the search engines would care to admit.
The lawsuit was filed on behalf of Crafts by Veronica, a New Jersey-based maker of fabric-covered photo albums. Filed in a New Jersey federal court, the suit seeks class action status against Yahoo, Overture, and unnamed third parties. It accuses Yahoo of breach of contract, unjust enrichment, civil conspiracy and violations of the New Jersey consumer fraud act. If the suit receives certification by the court as a class action, anyone can join if they have purchased ads through Yahoo's pay-per-click system within the last six years.
What did Yahoo do to bring this suit upon itself? It led the companies who advertised with the search engine to believe that their ads were being displayed on "highly targeted" websites, when in fact they were being displayed on sites showing spyware pop-up ads and typosquatter websites. If it was accidental, that would be one thing, but the suit argues that Yahoo continued this practice "even though defendants knew that a substantial percent of click revenue resulted from PPC advertisements shown improperly, including in ways that contravene defendants' contracts with its advertising customers."
Yahoo isn't talking about the suit. A Yahoo representative stated that "We're not going to comment on this matter other than to say that we plan to vigorously defend our position." The courts will sort out whether the suit has any merit, of course, and I'm certainly not a lawyer. Nevertheless, it's worth taking a look at the evidence to see what kind of hot water the venerable search engine has gotten itself into, and how.
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