Friday, May 16, 2008
Yahoo to Icahn: Buzz Off
If the old media advertising economy is in the toilet, then its new media counterpart is sitting atop it.
According to figures compiled by the Interactive Advertising Bureau, spending on Internet advertising in 2007 rose to $21.2 billion, up 26% from the prior year. That’s a record high and one that exceeds the $20.9 billion spent on print, radio, outdoor and cable TV.
Unsurprisingly, keyword search, Google’s (GOOG) cash-cow ranch, generated the most revenue and claimed the largest market share–41%. Display advertising followed with 34%, classifieds at 16%.
(Image Credit: Tyler Jordan, eVisibility Insider)
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 BigReds.com, 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.
John Paczkowski has been poking fun at the tech industry and the personalities that drive it since 1997. From 1999 to 2007, he wrote the award-winning tech news Web log Good Morning Silicon Valley for the San Jose Mercury News, Silicon Valley's daily newspaper.
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
You’re fourteen and have no source of income. What would convince me to lend you money if I’m not sure you can pay it back?
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