• by Wendy Davis  @wendyndavis, April 13, 2006

Documents accompanying a lawsuit filed by New York State Attorney General Eliot Spitzer against adware company Direct Revenue indicate that Yahoo Search accounted for around $200,000 a month of the adware company's revenue last spring.

The search ads apparently came to Direct Revenue from the company Walnut, which was a distributor for Yahoo Search. An e-mail dated June 2, 2005 states that revenue attributable to Yahoo Search ads came to $226,964 in April, $193,944 in May, and was estimated at $180,000 for June. "All revenue was derived through Overture's CPC feed (courtesy of Walnut)," stated the e-mail. The search links apparently were displayed to users who mistyped a URL, triggering a "404 file not found" error message. Yahoo is not accused of wrongdoing in the lawsuit filed by Spitzer.(See related story about Direct Revenue's business practices in today's OnlineMediaDaily.)

A Yahoo spokeswoman said that Walnut was an authorized distributor of paid search listings, but that the company did not do business with Direct Revenue, and never authorized Walnut to pay Direct Revenue. "Yahoo!/Overture has never had a distribution agreement with Direct Revenue, nor have we ever paid Direct Revenue for services. They have approached us on several occasions, and we have repeatedly declined their proposals," stated the spokeswoman.