Yahoo Faces Class-Action Spyware, Ad-Sales Suit
Grant Gross, IDG News ServiceFri May 5, 2:00 PM ET
An antispyware activist and lawyer has filed a class-action lawsuit
against Yahoo, accusing the Web heavyweight of placing advertisements
on spyware-vendor and "low-quality" sites.
Ben Edelman, a Massachusetts lawyer and spyware researcher, is one of
the lawyers who filed the lawsuit earlier this week on behalf of Yahoo
advertiser Crafts By Veronica, as well as other advertisers. The
lawsuit, filed in U.S. District Court in New Jersey, accuses Yahoo and
its ad sales subsidiary Overture Services Inof charging higher rates
for ads promised "premium" placement, but then placing those ads on
spyware-vendor sites and on Web pages with URLs that are misspellings
of popular sites.
A Yahoo spokeswoman wasn't immediately available for comment.
The lawsuit seeks to recover the money advertisers paid to Yahoo for
premium, "highly targeted," ad placement at Web sites including ones
owned by Microsoft and CNN, Edelman said. Although plaintiffs' lawyers
have not released an estimate of damages, it could run into the
hundreds of millions of dollars, he added.
"It seems like there's a lot of money at issue," Edelman said.
The lawsuit accuses Yahoo of placing ads on sites run by Intermix
Media and Direct Revenue, two companies identified in an April lawsuit
by New York Attorney General Eliot Spitzer as distributors of spyware
and unwanted pop-up adware. Both companies have disputed Spitzer's
Edelman agrees with Spitzer's assessment of the two companies, he
said. "It's software that at least sometimes gets on your computer
without your permission," he said. "It tracks where you go online."
In addition, Yahoo places ads on so-called "typosquatting" Web sites,
the lawsuit says. Typosquatters register Web sites that have URLs that
are common misspellings of popular Web brands, and many typosquatting
sites that Yahoo placed premium ads have long lists of advertisements
as their only content, the lawsuit says. Ads placed with Yahoo have
appeared on Expedai.com, a typosquatter of the popular Expedia.com
travel site, the lawsuit says.
Copyright 2006 PC World Communications, Inc.
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