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Yahoo Funds Adware, Advertisers Unkowingly Lap It Up

Advertisers have, thankfully, been given the option to opt out of Google’s AdSense network and many have… considering how visitors coming from content Web sites are vastly different than those coming from an active search at Google.com. What about Yahoo Search customers? Do they have the ability to opt out of receiving adware traffic that could, in fact, be driving up their advertising expenses?

When It Rains, It Pours
As if Yahoo needed more to worry about lately, Ben Edelman just (minutes ago) released his new report How Yahoo Funds Spyware and points out that advertisers have no ability to opt out of spending on such traffic.

Do advertisers even know they receive traffic from adware companies like Claria, eXact Advertising and Direct Revenue? Well, not really according to Edelman who has documented the fact that “Yahoo has failed to tell advertisers about its controversial syndication partners, even in general terms.”

What to Do?
What should Yahoo do? Edelman suggests, “Yahoo should begin by developing and distributing clear rules for who may syndicate Yahoo Overture ads,” but doesn’t stop there.

“After clarifying its stance on spyware syndicating Overture ads, Yahoo needs to redouble its efforts at enforcement,” says Edelman. “Enforcement also needs to include real penalties for those who break the rules.”

Pressure Builds to Cut Losses
Indeed, potential advertiser backlash (if they ever wake up) and consumer demand are cited in Edelman’s research as good reasons for Yahoo to consider making sweeping changes. The company also faces regulatory pressure to avoid supporting adware through click ad syndication. Recently, the New York Attorney General’s investigation revealed Yahoo contributed 10% of Intermix’s (adware) revenue and the NYAG staff, according to Edelman, suggest they’re “not ruling out” litigation against Yahoo for funding Intermix.

Of course, we now hear of reports indicating a possible NYAG investigation of Direct Revenue.

“After Yahoo’s support for Intermix, I suspect NYAG won’t be pleased to see Yahoo funding Direct Revenue too,” says Edelman.

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