Yahoo Accused of Spyware-Related Misdeeds - A Familiar Name
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One of the lawyers on the side of the plaintiffs has a name that might ring familiar to you: Ben Edelman. Spyware expert and Harvard doctoral candidate, I last wrote about Edelman in this article, published back in July of 2005. At that time, he had found a string of evidence that showed a stream of money flowing from those who advertised with Google, through Google itself, back out to Google affiliates, and eventually winding up in the hands of adware and spyware companies. So much for Google's "don't be evil" motto. In August, Edelman reported on a similar stream involving Yahoo's PPC system.
If anything, the problems have gotten worse since then. Last month, Edelman reported on his website that "I now have many dozens of different examples of Yahoo pay-per-click ads shown with spyware." This is not an occasional problem. It's what Edelman refers to as syndication fraud, and as with Google it goes through several stages: advertisers place ads with Yahoo, Yahoo pays its affiliate sites place/run the ads, the affiliates in turn pay/place the ads with their affiliates, until the ads get shown by spyware.
It gets even worse. Edelman insists that "Yahoo's spyware problems extend beyond improper syndication...[With some spyware showing Yahoo ads,] spyware completely fakes a click -- causing Yahoo to charge an advertiser a 'pay-per-click' fee, even though no user actually clicked on any pay-per-click link. This is 'click fraud.'"
In conventional click fraud, pay-per-click ads are clicked by users (or programs) that have no intention of purchasing anything from the business owner. This is sometimes done by competitors seeking to drain their rival's advertising budget. It has been a real problem for search engine advertisers, who have complained to the search engines about having to pay for fraudulent clicks. In some cases, they've taken their claims to court, and won. Google recently paid $90 million to settle a class action click fraud lawsuit in which Yahoo is still a defendant.
On his site, Edelman highlighted four specific examples of spyware-syndicated PPC click fraud. The first three were the most interesting. Edelman browsed certain websites with a computer infected with spyware installed without consent. In the first example, "I received a popup that immediately forwarded traffic to a Yahoo Overture PPC link -- faking a click on that link, and charging an advertiser as if a user had clicked on that link, even though I had not actually done so." He was able to trace the flow of traffic to 180solutions, a company known for its spyware.
For Edelman's second example, a spyware popup ad redirected him without a click to the exact same website he was actually browsing! In his third example, a spyware popup showed him an ad for something he had never shown any prior interest in. That can hardly be described as displaying ads to "high quality" traffic!
Next: Who are the Spyware Companies? >>
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