Yahoo Class Action Settlement Is Bad News For Domainers!

DirectNavigation.com wrote today about a notice that went out to anyone who advertised with Yahoo or the its prior service GoTo.com, on its PPC program(s) anytime from May 1, 2000 until September 22, 2009.

That’s a lot of advertisers.

The class action arose out of a suit by advertisers against Yahoo, alleging that Yahoo:

“””breached its contract with its customers by allowing Yahoo! ads to be displayed in spyware, domain name parking sites (also known as bulk registration sites), pop-ups, pop-unders, and typosquatting sites. Plaintiffs brought claims for breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.””

According to the settlement each advertiser is entitled to receive the earth shattering sum of $20.

Right $20 USD.

The lawyers, well they are getting only $4,170,000.00, in fees, plus reimbursement of expenses of approximately $100,000.

But I digress.

Back to how this settlement is bad news for domainers.

In settling this case, Yahoo basically agrees to allow advertisers to basically opt out of the domain channel starting sometime next year:
“””Yahoo! has agreed to develop and offer a new ad placement option that will enable Yahoo! Ad customers to control where their Yahoo! Ads appear.””

“”The Ad Placement Option will allow Yahoo! Ad customers to specify that their Sponsored Search ads should be displayed only on websites and other Internet properties owned or operated by Yahoo!, and the websites of certain “Premium” distribution partners.””

“”Yahoo! has agreed to make best efforts to launch the Ad Placement Option as early as the first quarter of 2010, but in no event later than September 30, 2010.””

“”Yahoo! will maintain the Ad Placement Option for at least two years from the date of its launch.”””

Moreover Yahoo says this change will carry over to its deal with Microsoft.

“”Microsoft will agree to implement ad distribution controls on the Microsoft paid search platform””

The problem is that there is general perception that the domain channel is full of typo traffic and generally undesirable traffic, as alleged in the lawsuit.

Unless Yahoo ad executive are trained to understand and educate their advertisers as to the difference between opting out of the domain channel completely, rather than selectively, keeping ads up on generic domains geared toward their business, all domains will suffer.

By the way, if you were an advertiser and want to check in on that $20 windfall, you need to submit a claim online by March 22, 2010.

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Yahoo Class Action Settlement Is Bad News For Domainers!