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Yahoo Sued Over Of "Defective" Ad System

searchengineland.com — A class action lawsuit has been launched against Yahoo claiming it mislead investors that its new ad system would make more money.

Who dugg this? Made popular May 15, 2007

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  • inactive, on 10/11/2007, -2/+12We tracked aggressive pay-per-click advertising campaigns on Yahoo and Google. Yahoo ads cost us approximately twice as much per click. Their new system is a financial black box--there isn't much you can do except to pay their fees, and you don't know what they are until you've paid them.

    The Google ads converted five to ten times more than the same ads on Yahoo. I really can't figure it out and can only hypothesis why. Are users more likely to buy from a Google search? Personally, I sometimes do a Yahoo search but switch to Google before completing my research. I guess I must think Yahoo search just doesn't deliver enough good results.

    Advice for Yahoo--1) Get a better search engine or re-license Google search and brand them so users don't consider going to Google, 2) Your strategy of "we win if you lose" is contrary to Google's "if you win, we win" mission, and 3) Your minimum bid of ten cents per click is a huge revenue mistake. Lower it to a penny and let the free market take over.


  • dannysullivan, on 10/11/2007, -1/+10Yes, it's a pity Digg doesn't have a feature that allows those submitting to fix headlines. A good story is a terrible thing to waste due to a typo :)
  • daRoach, on 10/11/2007, -0/+7I hope a settlement is reached in favor of the investors. Once that happens I will invest in every company in the market and sue the ones who don't make me any money on false pretenses that they were going to succeed. Either way I win!
  • Shaman760, on 10/11/2007, -4/+11Yahoo is the AOL of the 21st century. They flat out suck.
  • GiggleStick, on 10/11/2007, -0/+5Webtickle Ridiculed Over Of "Defective" Digg Title
  • unloud, on 10/11/2007, -0/+4But will you die?
  • fkr3, on 10/11/2007, -3/+7It would have made more money, if Yahoo didn't allow it to be exploited by the same retards who previously exploited Google AdSense.

    People were deliberately setting up sites to display unrelated ads with the highest values and disguising the ads to seamlessly blend in with content. Yahoo knew about it, let it carry on, and deserve to be sued for it.

    So does Google.
  • Alex76, on 10/11/2007, -0/+4Google had a similar lawsuit filed against them, I believe a settlement was reached.
  • Seruphim, on 10/11/2007, -2/+6Buried on account of the grammar in the title stopped me from knowing what the story is about
  • unloud, on 10/11/2007, -0/+2Here's something from the article I didn't understand:

    "Many advertisers feel that Microsoft has the most sophisticated ad platform of the big three. However, I've long written it has lacked that one key feature that the engineers can't build in, consumer traffic. If no one is searching, then you can't show them ads and make money from them."

    As someone who has used advertising services from MSN, let me be the first one to say this is complete bull crap. The relevancy of their ads to page content is laughable, and although Yahoo and Google have their own problems with doing that, Microsoft easily has the worst recognition algorithm.
  • youdlike2know, on 10/11/2007, -0/+2I've used Adwords, YSM and MSN.. Adwords makes the other 2 systems look like they were coded by monkeys.. MSN is crap for a number of reasons, but who cares, nobody uses it.. YSM was actually alright up until they switched over to panama a few months ago.. But the new system is full of bugs, my conversion tracking still doesn't work after all this time and their tech support denies there's a problem with it. Their system isn't displaying ad's correctly, their impression count is off, and their estimated ad position is wrong..

    So yeah, this guy may have a case
  • dannysullivan, on 10/11/2007, -0/+2In terms of sophistication, what I mean is the targeting ability -- you can daypart; you can demographically part. Especially when adCenter first came out, many advertisers did say that it had features that were beyond those Google and Yahoo offered.

    This is important mainly from the top level view this class action suit takes. It suggests that somehow, Yahoo's system lacked the right features and that in turn, this somehow meant *searchers* didn't come to Yahoo. The connection makes no sense.

    In terms of actual performance, it might very well be that Microsoft is behind Google and Yahoo. Unfortunately, we don't get a lot of benchmarks to use for this.
  • wiihuck, on 10/11/2007, -0/+2@ sneezy

    did you make the last part of your comment incomprehensible as some sort of sarcasm? if so, i don't get it.
  • theNEOone, on 10/11/2007, -0/+1So the investors are suing.....themselves? This is ridiculous. As an investor what you do is change management...not sue the very company you own a portion of. Wtf is the point? If you win the lawsuit, you win one small battle but lose twice over. (1) Yahoo's profits drop after they include the settlement in their financials...less dividends. What else happens? ***** press and publicity....stock plummets and your net worth goes down with it. WAY TO GO!
  • igyigyigy, on 10/11/2007, -0/+1Don't forget the legal fees!
  • RichM, on 10/11/2007, -0/+1Yahoo's ad program is straight-up broken. I've tried it on my site and the targeting simply doesn't work. I put in a support ticket about it. They said they recognized I had a problem and were working on it. That was months ago - nothing has changed.
  • Winters, on 10/11/2007, -0/+1@readthis

    Especially number 3, but you're right that won't work unless they revamp their engine. I think it would be a bad idea to use google's engine but they can throw some money on making their own algo better. Thing is that they have to recognize they are an alternative to Google, so they don't want to have nearly the same results, having different results will make them more useful. I think their directory has some potential as well as long as they don't approve sites that are too spammy.

    Both of them need to reduce the amount of linkspam but that's another story.
  • Novagenesis, on 10/11/2007, -1/+2I read the article in the first place.
    That's how I saw it.

    It's not like Yahoo went forward convinced they'd lose their shirts.

    I still feel it's stupid for investors to have any right at _ALL_ to sue the companies they invest in, unless they directly lie about the numbers to inflate/deflate stock prices. They did not.

    I think there's a case for other people to sue yahoo.

    I still think it's a "I love money because I decided to invest in the stock market, whiiiiiine"
  • mjesales, on 10/11/2007, -0/+1I'm not sure how the rest of you have fared - but i can't get yahoo to serve a relevant ad on my sites to save my life. Nor can I get the campaigns to work from the advertiser side of thing. If you call them up - they just said that it was a beta program.
  • elementfire, on 10/11/2007, -0/+1...except that AOL is still around. And they still suck.
  • spyrochaete, on 10/11/2007, -0/+1Digg needs the ability for users to submit alternative headlines and vote on the best one. That's what makes it Digg, no?
  • spyrochaete, on 10/11/2007, -0/+1Did you forget how to use the thumbsup/thumbsdown buttons over those 2 years? Or the reply button? What the hell are you talking about?
  • dusingaz, on 10/11/2007, -0/+1I've always had good luck with Yahoo, I don't do content, but I spend 30k /m on average on search. However with the new system the bids have really gone up, and it is no almost completely blind. Atleast before you could see the other bids, and usualy play games with the other top people to get the cost down but maintain ranking... Now it is a little crazy, plus it tends to lie to you, saying you need an inflated amount to be #1, the number maybe $1 more than #2, but it helps speed up the bidding up of keywords.
  • Sneezyx, on 10/11/2007, -1/+1Is it asking too much for a submitter to look over the headline to ensure it makes grammatical sense? Really? Most posting on the Web absolutely mean, "What, me self-edit?"? (mutter, mutter ...)
  • vdxc, on 09/29/2008, -1/+1Google's investors made millions because of it's ad system. Were they "defective" to invest in what has become one of the largest technology companies.

    Investing wisely is what investors are meant to do, here it seems investors believe that they were mislead and convinced by Yahoo! of something which Yahoo! couldn't offer. It all boils down to the fact that the investors invested money, didn't make such a great return as promised by Yahoo!, now they want Yahoo! to pay for not meeting expectations.
  • inactive, on 10/11/2007, -0/+0Who is the submitter of this story? His name is Neil Patel, a black hat SEO blogger from this website: http://www.pronetadvertising.com/about/ and this one http://mashable.com/consulting. He and his group are known for gaming digg. He accepts monetary payments to submit stories to digg that promote notorious spam and SEO sites. Recently he said digg was censoring him, but it was the good digg users who've had enough of him and his SEO friends, so they bury his veiled spam.

    Some of his spam stories:
    http://digg.com/offbeat_news/Warning_Thousands_of_Jellyfish_Invading_Hawaii (A Hawaiian tourism site)

    http://digg.com/environment/147_Tips_to_Live_Healthier_Happier_and_Greener (A credit card site)

    http://digg.com/hardware/10_Ways_to_Recycle_Your_Old_Computer (A 100% Spam site)

    Also note how many times he submitted mashable.com or readwriteweb.com

    I can provide more proof, but by doing that I will be reveling my real identity too and that's something you don't want to do with these dangerous SEO's. Your account is enough proof http://digg.com/users/webtickle/news/submitted

    Yes Neil Patel, (webtickle) I know everything because I was and still am in your circle of friends. The time has come to stop you and your SEO friends from gaming digg and accusing it of censorship when sites that paid you to submit their stories don't make it to the digg home page.

    The truth will always prevail. You know what you're doing but will deny it. Your credibility is on the line, tread lightly.
  • Parrotheader, on 10/11/2007, -0/+0I can only speak for myself, but we're actually spending significantly more money for our clients on Yahoo now than we were previously due to the improvements in the new system. There were a lot of campaigns in the past where would've liked to have done more on Yahoo, but couldn't due to the system. It's still a long way from perfect, but the changes needed now are more incremental and would seem to be fairly basic upgrades as opposed to the massive overhaul it just underwent.

    The main thing is audience though. You could have the best ad network in the world, but if no one's using it it doesn't matter. I hope they can regain some marketshare, because the market needs a strong, viable competitor to Google.
  • inactive, on 10/11/2007, -2/+2@ mporcheron

    PAY CLOSE ATTENTION THIS TIME

    ... an ad system ALONE...
  • coho75, on 10/11/2007, -0/+0The article is about YSM not YPN. It has nothing to do with ads that you placed on your site.
  • ghostnet, on 10/11/2007, -0/+0The lawyers win!
  • unloud, on 10/11/2007, -1/+1They aren't suing because the stock isn't doing well, they are suing because they believe Yahoo Misled investors. Read the article.
  • Novagenesis, on 10/11/2007, -2/+2This is stupid.
    You can sue a company now if you're investing in it and it doesn't do well enough for your tastes?

    Heck, that's practically FDIC-level insurance so long as the company doesn't go under (which it will AFTER you sue them for having a stock price drop)!
  • inactive, on 10/11/2007, -2/+2"Defective" would describe the mentality that someone would believe an ad system alone would make investors more money.
  • Topher06, on 10/11/2007, -1/+0Haven't you figured out by now that its the articles and titles filled with bad grammar that get on the front page, mostly because of people's need to correct errors and comment on how lousy it is. People have learned long ago that most Digg users don't care what the article is about, its about posting about how bad the grammar is, or looking for a chance to correct other's errors. It inflates the popularity of a submission which in turn causes more people to arrive and comment.

    I know its ironic I am taking the time to point this out and not relate to the article, but the best thing to do when a submission is filled with bad grammar or inaccurate titles is to simply ignore it. Less posts means less exposure means the article dies rather then being promoted to the front page.
  • DorkPunk, on 10/11/2007, -2/+0I havn't actually logged into digg in almost 2 years. I just did to digg this down because I'm so damn sick of seeing the word "Stunning" for stupid photos.
  • TheIneffableBob, on 10/11/2007, -9/+2But will it blend?

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