Yahoo settles pay-per-click fraud suit

Yahoo has settled a lawsuit over pay-per-click ads sold by Yahoo that wound up in some shady corners of the Internet.

Back in 2006 Yahoo was sued by a class of advertisers who alleged that Yahoo sold them ads that were supposed to appear on "highly targeted" sites and instead wound up on sites filled with spyware or run by typo squatters. Without admitting any wrongdoing, Yahoo has agreed to settle the lawsuit and change the way it sells certain ads across its sites, according to a settlement notice posted by Rust Consulting, the settlement administrator.

Yahoo will create an "Ad Placement Option" for advertisers to guarantee their ads will appear only on sites owned by Yahoo or sites designated as "premium" partners. That feature should appear early next year but Yahoo has a deadline of September 30, 2010, to provide advertisers with that option.

Advertisers will also get better tools for measuring traffic quality and potentially troubling sites bearing their ads. Yahoo said the deal will still be in place assuming it gets the regulatory approval to outsource its search business to Microsoft. Yahoo plans to retain the right to sell search ads on its sites once that deal is official.

If you went out of business as a Yahoo ads customer, you're eligible for $20, which should really make the pain of that failed business venture go away. As TechCrunch notes, the real winners here are the lawyers: of the $4.3 million settlement, $4.17 million is going to the lawyers.

More information on the settlement can be found here.

[brienza1975]

20$??....Whoopdie do da!!!!!

[ThatGuy2-1]

what an awesome day for lawyers!

[gthiruva]

Uh, so by using the title "Yahoo settles pay-per-click fraud suit", are you referring to the $4.1 million in fraud committed by the attorneys?

According to the settlement notice the real settlement to the three Class Representatives is only $10 a piece. I guess that's OK if $10K or less was spent by each party on ads that ended up on typo-squating sites. If they spent more, they are still ripped off. But $4.1 million on attorneys fees and $100K for expenses? That's 97% of the settlement.

There needs to be some reform in how class action cases are handled and billed and how settlements are administered. I find it hard to believe that the attorneys weren't acting solely on the client's behalf - as they are ethically supposed to.

Members of the class have until Dev 14 to oppose the settlement or show up "on January 11, 2010 at 10:00 a.m., at the United States Courthouse, 312 N. Spring St., Los Angeles, CA 90012, in Courtroom No. 5".

Yet another class action lawsuit and settlement which is insulting to intelligence of people in this country.

[Internet-Lawyer]

Internet publishers should always be required to provide information to online advertisers as to placement; however, since this is unlikely to be provided in the bulk of the cases, it is up to web and mobile advertisers to negotiate ad placement in their online advertising contracts. Too many advertisers get into Pay Per Click (PPC) deals with little understanding of where their ads will appear. While I agree that this settlement is an embarrassment to most lawyers, it may serve to push internet publishers for more disclosure. -- by Online advertising lawyer -- http://www.web20lawyer.com/page0/page6/online-marketing-advertising-compliance.html