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Retailer Sues Yahoo For Permitting Click Fraud

Internet retailer Bigreds.com is accusing Yahoo of click fraud: overcharging by thousands of dollars as a result of fraudulent clicks that Yahoo did little to prevent. Bigreds, which sells collectibles, is suing the Web giant for more than $1 million after spending more than $900,000 between 2002 and 2006. These fees were based on the number of clicks that Bigreds ads received on sites affiliated with Yahoo and Yahoo's Yahoo Search marketing unit, formerly known as Overture Services.

"These clicks were not actual traffic, but were fraudulent clicks," reads Bigreds' complaint, filed earlier this month in U.S. District Court in New York. "Affiliates of Overture used software programs, employed people, and/or directed people other than actual customers to click on plaintiffs links from keyword search results."

Bigreds points out that Yahoo in 2006 acknowledged the click fraud problem, but only offered a refund of $17,000. It also claims that Yahoo had the technology to prevent click fraud but did not take steps to do so. Click fraud is a problem that plagues all the major search players, including Microsoft and Google. Google was forced to settle a similar lawsuit from several of its advertisers a few years ago.

Read the whole story at Information Week »

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