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According to Business Week, Yahoo has become one of the main benefactors of the spyware industry. The paper says that since 2003, the Web portal has indirectly supplied ads and shared millions with pop-up outfits and spyware suppliers. For additional payments, Yahoo passes along much of its considerable advertising base to other publishers and distributors. These distributors have partners like Direct Revenue, noted pop-up purveyor. The fees are shared by all partners involved. These distributor chains can be long and hard to follow, but that's exactly what spyware crusader and Web consultant Benjamin Edelman has done. He recently followed one chain that starts with Yahoo and ends with Direct Revenue, following the distribution cycle of a Dell, Inc. ad. He also found that one distributor, Walnutt Ventures, who earns 91 percent of its revenue from Yahoo ads, built much of its business by bridging the Web giant and Direct Revenue. Meanwhile a former Yahoo sales exec admits to Business Week that the company knew it was dealing in spyware pop-ups in some instances. In fact, court and regulatory filings show that the Yahoo-Direct Revenue chain banked hundreds of thousands of dollars a month for each company in 2004 and 2005. Following the report, Yahoo said it wouldn't comment due to pending litigation. Dell, meanwhile, said it doesn't allow its ads to appear in spyware pop-ups but would not comment on its relationship with Yahoo.

Read the whole story at Business Week.

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