Yahoo! Accused of Ad Fraud

Posted May 5th 2006 3:50PM by Tobias Buckell
Filed under: Bad News, Industry, Google (GOOG), Yahoo! (YHOO)

Yahoo's stock performance is tied closely to online revenue. A lot of the recent focus on Yahoo! is over the large stash in online and search-related advertising it brings in. Yahoo! holds a close second place to Google. So seeing that Yahoo! is being sued by online activist Ben Edelman for fraud against advertisers is potentially huge news.

The lawsuit alleges that Yahoo! is gaming the number of eyeballs on its ads by knowingly using URLs with typos in them. Edelman has closely documented how third party spyware programs serve Yahoo! ads and fake clicks on advertisements. Again, these spyware programs aren't made by Yahoo!, but are used by many of the syndication relationships Yahoo! has. Edelman claims that Yahoo! is letting it slide, or even using these fake clicks to its advantage.

Google got slapped with a $90 million dollar lawsuit for click fraud. Will Yahoo!'s ghost clicks be enough to cover the downfall of a similar sized lawsuit? Stay tuned...

Tags: ad fraud, AdFraud, online advertising, OnlineAdvertising, yahoo