Study: Yahoo Behind Click-less Click Fraud

Search Engine Journal, Infoweek, WebPro News and just about every other news source, are all chattering about the new study done by Harvard researcher Ben Edelman that accuses Yahoo! of benefiting from rampant click-less click fraud activity generated by known spyware vendors.

Edelman’s study entitled, The Spyware – Click-Fraud Connection – and Yahoo’s Role Revisited, illustrates, in painstaking detail, how spyware makers and search-ad syndicates are using Yahoo’s Overture to generate fake clicks. Edelman highlights how spyware companies are manufacturing irrelevant pop-up ads designed to direct traffic through Overture ads by imitating a real click without the use of a computer. According to Edelman, once the click is registered, Yahoo then charges the advertiser and splits the revenue with the spyware vendor, despite no user ever having clicked on the PPC link.

How does this work? Ben explains:

“Yahoo pays numerous other companies to show these ads via syndication relationships. So when a spyware vendor can’t find advertisers to buy its ad inventory directly, the spyware vendor can show Yahoo ads instead. Every time a user clicks on such an ad, the advertiser must pay Yahoo. Then Yahoo pays a revenue share to the spyware vendor that showed the ad.”

Oh, boy. But does Edelman have the data to back up his damaging claims? Unfortunately for Yahoo, does he ever. For each instance, Edelman provides a full packet log, annotated screenshots and video of the click fraud taking place.

Edelman lists three examples in his report, (literally) highlighting suspect activity between Yahoo and adware vendors 180solutions, Look2me Adware and Qklinkserver.com/Srch-results.com. As additional proof, Edelman includes video and traffic logs that link the fraudulent clicks back to Overture. Edelman says the logs were obtained using a packet logger that provides a snapshot of all the traffic flowing through Edelman’s Ethernet cable.
Yahoo issued the following statement soon after the study began circulating:

“Yahoo! takes the quality of its search ad distribution network very seriously,” the company said via e-mail. “We are carefully investigating the claims that have been raised. Once we determine the sources of these implementations, we will take appropriate action, which could include terminating a feed, ending a relationship with a partner or taking legal action against an offending entity.”

This is not the first time Edelman has accused Yahoo of benefiting from click fraud. He submitted a similar report in August of 2005. Ben wraps up his study with a harsh warning for Yahoo.

“The problem is not going to go away. In fact, it is likely to get worse. The market for spyware vendors is drying up, mostly because are aware of the problem and corporate advertisers no longer want to be associated with it. The spyware makers are increasingly turning to more complex systems, including the money-rich PPC market, to find susceptible targets.”

Lisa Barone is a writer, content marketer & VP of strategy at Overit Media. She's also a very active Twitterer, much to the dismay of the rest of the world.

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