Fergie's Tech Blog

Ben Edelman: How Yahoo! Funds Spyware

Yeah! Ben is active again! Horray! :-)

Ben Edelman writes in his blog:

Yahoo's Overture (recently renamed Yahoo Search Marketing) allocates pay-per-click (PPC) ads among Yahoo's network of advertisers. When users run searches at yahoo.com, Yahoo's advertisers are assigned placements at the top, right, and bottom of search results. Advertisers pay Yahoo a fee when users click on their ads.

But Yahoo doesn't just show advertisers' ads on yahoo.com; Yahoo also distributes advertisers' ads to Yahoo's various syndication partners. Many of these partners are entirely legitimate: For example, most advertisers will be happy to show their ads to users running searches at washingtonpost.com, where Yahoo sponsored links complement searches of Post articles.

However, serious concerns arise where Yahoo syndicates advertisers' ads to be shown by advertising software installed on users' PCs -- software typically known as spyware or adware. In my testing, Yahoo's support of spyware is widespread and prevalent -- an important source of funding for many spyware programs, bankrolling infections of millions of users' PCs. Were it not for Yahoo's funding of these programs, the programs would be far less profitable -- and there would be fewer such programs trying to sneak onto users' PCs.

Yahoo's funding of spyware is not unique. I've recently written about Google's funding of similar bad actors (1, 2). Earlier this year, FindWhat disclosed related problems, admitting that terminating its dubious distributors would reduce revenues by at least 5%. But in my hands-on testing of various spyware-infected PCs, I find that I receive Yahoo-syndicated ads more frequently than I receive such ads from any other single PPC network.

posted by Fergie @ 8/31/2005 05:59:00 PM