Yahoo Hit With $1 Million Click Fraud Lawsuit - InformationWeek

An Internet retail merchant that used a pay-per-click advertisement service operated by Yokel is suing the Internet giant for more than than $1 million, claiming it was overcharged by one thousands of dollars as a consequence of chink fraud that Yokel did small to prevent.

Bigreds.com, which sells collectables online, said it paid Yahoo's Search Selling unit, formerly known as Overture Services, more than than $900,000 between 2002 and 2006. The fees were based on the figure of chinks that Bigreds advertisements received on land sites affiliated with Yokel and Overture.

Bigreds claims that many of the chinks were not from legitimate purchasers but from affiliate Web land site operators who received committees from Overture and Yokel based on the figure of chinks their land sites generated for advertisers.

"These chinks were not existent traffic, but were deceitful clicks," Bigreds claims in tribunal document filed earlier this calendar month in U.S. District Court in New York. "Affiliates of Overture used software system programs, employed people, and/or directed people other than existent clients to chink on complainants golf course from keyword hunt results," the ailment states.

Yahoo acquired Overture, which launched inch 1998 as GoTo.com, in 2003.

Bigreds claims Yokel in 2006 acknowledged the bad-click problem, but offered a refund of lone $17,000. Bigreds also avers that Yahoo's Overture unit of measurement had engineering and information at its disposal that it could have got used to forestall chink fraud but did not take stairway to make so.

"Overture was able to state what was bad, who conducted the bad click, where it came from, what keyword was involved and generally had superior engineering and entree to records in its rule that enabled Overture to find what people or physical things or affiliates were involved," the lawsuit claims.

Bigreds is seeking more than than $1 million in amends and penalties. Yokel have yet to register a formal response to the allegations.

Click fraud is one of the multi-billion dollar hunt selling industry's dark secrets. Virtually all major players, including Yahoo, Microsoft and Google, have got been forced to admit the problem. Critics reason that hunt engines have got small inducement to patrol the pattern because much of their gross is generated by advertisement clicks.

Yahoo in 2005 paid $4.5 million to settle down a chink fraud social class action lawsuit. Google paid $90 million to settle down a similar lawsuit in 2006.