TEXARKANA, Ark. — A Texarkana gift shop that advertises on the Internet has filed a lawsuit against America Online, Google, Yahoo and other Web-centered companies alleging they knowingly overcharged the shop and other companies for "pay per click" advertising.
Lane's Gifts and Collectibles says in a Miller County lawsuit that the Internet companies charged it for advertising traffic not generated by bona fide customers. Lane's Gifts hopes to represent numerous other companies in a class-action lawsuit against the Internet companies.
Lane's alleges a conspiracy in which the companies worked with one another to create an online environment that harms advertisers.
The companies, it says, "have grown the Internet PPC (pay per click) advertising market while failing to disclose that they have routinely and systematically overcharged and-or overcollected for PPC advertising revenue from their customers."
A spokesman for Google, Michael Mayzel, said the company was reviewing the complaint. Officials from other companies could not be reached for comment on the lawsuit.
Lane's filed the lawsuit Feb. 4 and the defendants on March 30 asked that the case be moved from state court to federal court. The plaintiffs will likely oppose the motion, Mike Androvett, a spokesman for Lane's lawyers, said Tuesday.
Court records also show that two of the initial plaintiffs asked Monday to be dropped from the suit but retain the right to rejoin it later.
In the online advertising world, businesses pay Internet providers a fee based on the number of times their ads are "clicked." The click takes would-be customers to another page for more information.
Lane's said ads are often clicked only to generate a bigger bill for advertisers, not by someone truly seeking more information.
Estimates vary widely on how much click fraud is going on in the $3.8 billion search engine advertising market.
In an Associated Press story in February, Google and Yahoo acknowledged the perils of click fraud but said they believed improved internal controls and the increased vigilance of advertisers would prevent the problem from escalating.
Defendants in the Arkansas case include Yahoo! Inc., Overture Services Inc., Time Warner Inc., America Online Inc., Netscape Communications Corp., Ask Jeeves Inc., Buena Vista Internet Group doing business as Go.Com, Google Inc., Lycos Inc., Looksmart Ltd. and Findwhat.com Inc.
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