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Yahoo! Bait and Switch?

Posted on 5.02.2006

A Washington Post article recently highlighted a class action lawsuit against Yahoo!.

The suit alleges that Yahoo! defrauded pay-per-click advertisers by charging for ads that did not show up where they were supposed to.  Allegedly, advertisers paid for ads that would be placed next to search-engine results.  What they got were ads placed with spyware and adware products and "typosquatter" websites that capitalize on the misspellings of other popular sites (Expedai instead of Expedia, for example).  The difference in cost for the search engine ads vs. the improper ads is considered sizable and it's alleged that Yahoo! has been pocketing the difference.

What's worse for Yahoo! is the exposure of their relationships with these adware and typosquatting sites.  It's alleged that Yahoo! regularly uses them to increase revenues around earnings time.  Two named in the complaint as Yahoo! partners are Direct Revenue and Intermix.  Both of these companies were recently sued by New York Attorney General Eliot Spitzer for violations of consumer protection laws. 

A related bit:  McAfee's SiteAdvisor recently conducted a "Spyware Quiz" that revealed a mind-blowing 97% of Internet users being one click away from downloading unwanted spyware.  The quiz was taken by over 14,000 consumers - only 3% recorded perfect scores.  Based on their choices, 65% of the test takers would have been infected with several cases of spyware.  The quiz is based entirely on site appearance.  Many of the "bad" sites even had national advertisers on them, giving the impression of a "safe" site.  You can test your "spyware savviness" here.

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