Yahoo Called Spyware Pusher in Lawsuit

Anti-spyware activist Bed Edelman is leading a new round of charges that search and portal player Yahoo deployed clickfraud with the help of spyware in its dealings with Web advertising clients.

The portal giant has been slapped with a class action lawsuit spearheaded by Edelman and a mom and pop Web site called Crafts by Veronica.

The plaintiffs allege that Yahoo and its Overture subsidiary engaged in fraud by generating higher pay-per-click payments as a result of “Syndication Fraud” schemes, otherwise known as clickfraud in the industry.

According to a the complaint filed May 1st in U.S. District Court in New Jersey, Edelman and the Web site claim Yahoo promised to display their advertisements on other “highly targeted” sites, but instead placed the ads in spyware and on sites surfers only reach because of a typo in the URL they entered.

The suit claims that Yahoo breached its contractual duty of dealing in good faith “by collecting revenues for placements they knew, or reasonably should have known, were illegal as well as violative of their contracts with advertisers.”

A Yahoo spokesperson told only that Yahoo plans to “vigorously defend” its position.

Edelman has an idea of how they’ll go about trying to do that.

“Yahoo will say, ‘Hey, this is what we do. If you didn’t like it you didn’t have to buy ads from us. None of this is secret. You could find out what we were doing just by looking around the Internet. So you really have no case here,'” he told

Edelman, who posted an extensive research report about Yahoo’s ad practices in the industry last August, and updated it again last month, argues that Yahoo [and other search engines for that matter], have a duty to stick to the contract regarding PPC advertising contracts.

“We relied on good faith and correctness.”

Advertisers don’t like being associated with spyware.

In a statement announcing a lawsuit against spyware firm Direct Revenue, New York state Attorney General Eliot Spizter last month called the spyware practice “deceptive and unfair, bad for businesses, and bad for online retailers.”

Edelman said Crafts by Veronica and others never intended to associate with spyware.

The basis of the suit is that Yahoo tricked them into it.

Edelman said the small company well-represents the class in this class-action suit.

“Crafts by Veronica is an average, typical advertiser, not a huge company,” Edelman said, “They’re just trying to get a fair deal from Yahoo.”

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