Retailer: Yahoo Warned of Lower-Than-Expected Refund

Published on April 17, 2008
by John Paczkowski

Yahoo’s paid search performance may be the fastest growing in the industry, but that doesn’t mean it’s the most effective. In fact, some companies would argue it’s not that effective at all. Companies like, which is suing Yahoo (YHOO) for more than $1 million for click fraud.

The collectibles retailer claims it paid Yahoo’s Search Marketing unit, formerly known as Overture Services, some $936,000 between 2002 and 2006 for click-throughs. It assumed these click-throughs were from legitimate customers, but it turned out they were generated by Yahoo/Overture affiliates who received commissions based on the number of clicks their sites generated for advertisers.

“These clicks were not actual traffic, but were fraudulent clicks,” BigReds claims in the suit. “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.”

To be fair, Yahoo did offer BigReds a refund for the fraudulent clicks. It just wasn’t as large as the retailer had hoped–$17,082.80.

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