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April 17, 2008
Yahoo's $1M click fraud suit

Bigreds.com, an online retailer that sells collectibles, is suing Yahoo for more than $1 million for failing to prevent click fraud.

According to Information Week, the retailer paid Yahoo's Search Marketing unit, formerly known as Overture Services, more than $900,000 between 2002 and 2006 for clicks received on sites affiliated with Yahoo and Overture. Bigreds is claiming that many of the clicks were not from legitimate buyers but rather from affiliate website operators who received commissions from Overture and Yahoo.

"These clicks were not actual traffic, but were fraudulent clicks," Bigreds claims in court papers filed earlier this month in U.S. District Court in New York. "Affiliates of Overture used software programs, employed people, and/or directed people other than actual customers to click on plaintiffs links from keyword search results," the complaint states.

The retailer says Yahoo acknowledged the bad-click problem in 2005 and offered a refund of $17,000 but did not use its technology to take steps to prevent it from continuing to happen.

Yahoo paid $4.5 million to settle a click fraud class action lawsuit in 2005. Google paid $90 million to settle a similar suit in 2006.