Yahoo! and Click Fraud: Our Commitment to Protecting Advertisers

Yahoo! is pleased to announce that it has reached an important settlement agreement with Checkmate Strategic Group that will provide more clarity about our click protection efforts and significantly more transparency to advertisers in the future. We know that our customers – and the industry as a whole – have many questions and concerns about click fraud, especially given the litigation that Yahoo! and other search engines have been engaged in over the past few years and we're pleased to take a leading role in addressing this issue.

Extensive History of Clickthrough Protection
Looking back, when Yahoo! Search Marketing (formerly Overture) created the pay-per-click search advertising model in 1998, one of the very first challenges we identified was the potential for people with bad intentions to click on listings with the sole purpose of generating a charge to the advertiser. To address this challenge, we quickly established a system of proprietary technologies and people dedicated to protecting our advertisers from click fraud and other traffic quality related issues.

For the past eight years, our Clickthrough Protection (CTP) system has run 24 hours a day, seven days a week, using search and click data to identify suspicious clicks and remove them from our billing system. During that period, our system has identified and not billed advertisers for billions of clicks. This includes click fraud as well as other clicks that we believe shouldn't be billed to advertisers (for example, blocked IP addresses, double-clicks, back browser clicks).

Settlement with Checkmate Strategic Group
Yahoo! and Checkmate Strategic Group have been engaged in a class action click fraud lawsuit since June 2005. To help the Plaintiff's counsel and their experts understand what we do to protect advertisers, we invited them to Yahoo! to see our proprietary Clickthrough Protection (CTP) system in action, interview our team members, review our filtering data and determine for themselves whether Yahoo! is truly meeting that commitment.

After this thorough review, the Plaintiff's counsel and their experts determined that Yahoo! has in the past and continues to operate a click protection system that goes above and beyond what is necessary to address recent industry estimates about click fraud. We are very pleased with their finding, as it validates the effectiveness of our system, but we recognize that some advertisers may still have questions about certain clicks and that many advertisers want to hear more from Yahoo! with respect to click fraud and related issues.

To address this, both parties have agreed to the following settlement terms:

• One-Time Extended Claims Period: Yahoo! will offer advertisers a one-time extended claims period during which advertisers can submit click fraud claims for clicks dating back through January 2004. If our investigation determines that a credit is due that was not given previously, we will issue a 100% credit, which can be used however the advertiser wishes to use it. This claims process will be overseen by a retired Federal judge.
• Dedicated Traffic Quality Advocate: Yahoo! will appoint a Traffic Quality Advocate who will be dedicated entirely to addressing advertiser concerns about click fraud and traffic quality issues. This advocate will serve as the internal voice of the advertiser within Yahoo! on these matters.
• Annual Access to CTP System and Team: To ensure that the advertising community has ongoing visibility into our Clickthrough Protection system, Yahoo! will host a panel of individual advertisers at our CTP headquarters once a year. During these visits, we will allow the advertisers to review our systems, meet with the CTP team and provide feedback on how we can continue to enhance our approach to fighting click fraud.
• Industry-Wide Click Protection Efforts: Yahoo will work with a reputable third party toward building industry-wide efforts to combat click fraud, including development of industry-wide definitions of click fraud and a comprehensive lists of identified bots.
• Traffic Quality Resource Center: Yahoo! will commit technical and human resources to build a Traffic Quality Resource Center, which will provide advertisers with more detailed information about traffic quality issues (including click fraud) and solutions via FAQs, advice columns, best practices guides and additional access to analytics tools.

In addition, to provide advertisers with even more of the transparency for which they've been asking,, Yahoo! is also committing to the following efforts that go beyond the requirements of the settlement agreement:

• Traffic Quality Inquiry Response Times: Yahoo! will provide advertisers who submit click fraud- or traffic quality-related inquiries with a time by which they will receive the results of Yahoo!'s investigation or, if the investigation is particularly complex, a status update.
• Additional Traffic Quality Refund Detail: To provide advertisers with more clarity around refunds for click fraud and other traffic quality issues, Yahoo! will include additional detail in advertiser refund notices.

We're very pleased with this important settlement because it not only validates the strength of the search marketing industry and the effectiveness of our system, but also it allows us to move forward to work more closely with our advertisers and others across the industry to fight click fraud.

Reggie Davis, Associate General Counsel, Yahoo! Inc. and
John Slade, Sr. Director, Yahoo! Clickthrough Protection

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