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Yahoo Slapped With Million Dollar Click Fraud Suit

Affiliate click fraud cited as reason

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Collectibles site Bigreds.com filed against Yahoo over alleged click fraud that happened between 2002 and 2006.

Bigreds filed suit in US District Court in the Eastern District of New York over what they believe was Overture affiliate click fraud. Yahoo acquired Overture, formerly known as GoTo, in 2003.

InformationWeek noted the filing of the suit, performed on April 2nd. Yahoo has not responded to the accusation yet.

The court document shows Bigreds believes a lucrative affiliate program run by Overture led to the alleged click fraud. Affiliates earned up to 12 percent commission per click, with Bigreds sometimes paying over $3 per click.

“Affiliates of Overture used software programs, employed people, and/or directed people other than actual consumers to click on plaintiff’s links from keyword search results,” the suit said.

Only after learning about the existence of click fraud as a problem in the online ad industry did Bigreds seek a refund from Overture. A credit of $17,082.80 was offered for the period of April 28 to June 28, 2006.

Bigreds believes click fraud took over $204,000 of its ad budget during the period. They want that reimbursed, plus the same amount from the unknown people who clicked its ads. The company is also seeking a punitive damage claim of over $614,000.

Yahoo Slapped With Million Dollar Click Fraud Suit
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  • http://www.simplyclicks.com Simply Clicks

    Yahoo’s search engine partner model is wide open to click fraud. I’ve got a very good example that I’ve submitted to WebProWorld. It involves a very small engine that generated 50 times more traffic for a specific term than Google. Google 80% market share. The Yahoo partner engines less 0.1% market share. So far I’ve just had the usual excuses.

  • http://www.msperformanceonline.com Guest

    I really hope this works out for Bigreds. I am a small business (very) and I tried PPC ads. I never even had one sale converted and it wasn’t because my pricing was’nt competitve, it is. Even $500 in a month when there are no conversions is still too much for my blood. I believe it was click fraud and after 4 months of it I decided to never do ppc again.

  • http://profitlanceexposed.com Profit lance

    Yeah, I believe it no doubt. Even though using ppc can be very profitable wich I do use google and yahoo ppc to generate sales and leads for me everyday, I still have my supicions about honesty. It’s too much control this big companies have and no one to monitor there efforts, sort a speak.

    Most rookie ppc adverisers do loose money, they either learn from the lossor completly give up all together. I myself, took the beating and continued on to advertise.

    So as far as Bigreds claim, I hope he succeeds and has as much evidence as possible to backup his claims, I like to hear success stories when the small guys smack the hell out of the giants.

  • riker1981

    Yep Yahoo buying Overture was a big mistake. I use to advertise with overture and my funds will be depleted in seconds. I would contact them and say your referrals don’t match my traffic report and they would tell me my traffic program was incapable of tracking their referral program wtf? anyway, that was 4 yrs ago. I have not looked back since then

  • http://www.globalsubmissions.com Global

    This is EXACTLY the reason why I tell my clients to NEVER pay for a directory listing, sponsorships, etc…unless you pay only for those clients that actually purchased from you; if you pay for anyone clicking on your page, you’re getting screwed.

    If coding is done correctly from the beginning; there will never be any issues.  Unfortuntely, no one is investigating the thousands that are claiming they know what they’re doing when it comes to coding, submissions and optimizations.  I just talked to creep yesterday that has been ripping off his client (a business associate of mine) for months and no one will help him.  His guy was screaming at me over the phone that he had "monopolized" a specific keyword for the client, except that he’s been paying for the directory listing and there hasn’t been any keywords embedded, until that day we talked, I know because I printed the coding.  This idiot didn’t even know what a description was!  Makes you wonder eh?

    This kind of crap makes me sick and someone needs to kick the crap out of anyone that is ripping off their clients; especially those that *think* they know how to do submission work; i.e; typical web designers.

  • Guest

    We are a small business and rely heavily on PPC on Google and Yahoo. We believe that around 25% of our clicks are click fraud from envious competitors.

    We have looked at different click fraud deterents in the past but have never been convinced. Does anybody have any recommendations for products to at least deter click fraud??

  • S Adam

    If only more companies started suing, a few class action lawsuits would do some good too.

    I spend about $10,000 per month with Google PPC, we opened a yahoo PPC account and got massive click fraud on the first 2 days, we shut it down and had to fight with yahoo to get the charges canceled, which they did eventually do. we will never use yahoo PPC again because of this.

    Google has plenty of click fraud too, but they cancel part of the click fraud out automatically. it seems like yahoo does not care at all about click fraud.
     

  • http://schoolsgalore.com Mike

    Does not surprise me. Don’t folks know that they will eventually get caught doing this?

  • lyle

    I’m very glad to see someone going after click fraud. I was the victim of it myself but discovered the problem before going bankrupt.

    The PPC looked as though it would work in the beginning and looked like a good way to advertise in relation to income but soon was eaten up by fraud.

    I was unsuccessful in getting any kind of reply from Yahoo and just put the whole PPC thing behind me.

    It is bad enough to have to wade through the mire and muck of scams and fraud on a daily basis from the obvious places, but it really puts a bad taste in your mouth when you are a victim of fraud by a legitimate corporation.

    It seems like a good many if not all corporations have turned to some kind of fraudulent activities in order to increase the bottom line, but that is another very long story.

    Lyle

  • http://www.fiancee-visa.net Fiancee Visa Attorney

    Great article. Look forward to more what the other people in the law perfession think of this.

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