Following up on a story StepForth News ran last month, "Yahoo Used in Click Fraud Scheme", a class action lawsuit was filed in a federal court in New Jersey against Yahoo on Monday.

The author of the report our story was based on, Ben Edelman, is noted as one of the attorneys of record in the class action. Edelman is a graduate of Harvard law school and an internationally noted expert on spyware and adware.

The suit claims that Yahoo allowed its paid ads to be displayed via search queries generated by numerous spyware products. It goes on to say that Yahoo uses its relationships with spyware driven ad-sites to deliberately inflate its revenues towards the end of each quarter.

"Not only have Defendants turned a blind eye to abuse of their [pay-per-click] advertisi

ng system, but Defendants knowingly have manipulated that system for their own benefit, by increasing the volume of improper advertising displays during financial reporting periods when Defendants were at risk of failing to meet investor expectations." ( link to PDF of suit - source: Washington Post)

Though the named plaintiff in the case is a company called Crafts by Veronica, the suit claims an undisclosed number of co-complainants.

Click fraud has long been a concern in the search engine marketing industry and this is not the first class action lawsuit Yahoo has been involved in. It was also named in the Lane's Gifts and Collectables suit along with Google. Google reached a $90million settlement with the plaintiffs earlier this year.