Suit Against Yahoo Alleges Defective Ad Technology

  |  May 15, 2007   |  Comments

Yahoo is the subject of a civil suit alleging "operational deficiencies" in the firm's ad-serving technology caused Yahoo to lose market share and push down its stock price

Yahoo is the subject of a civil suit alleging "operational deficiencies" in the firm's ad-serving technology caused Yahoo to lose market share and push down its stock price.

The complaint says "Yahoo’s stock rose precipitously on defendants’ positive statements concerning Yahoo’s sales growth, record reported revenues and earnings and strong business fundamentals" and the shares rose to over $43 per share on January 6, 2006.

"However, concealed from investors was the fact that due to operational deficiencies in its ad technology, Yahoo was rapidly losing market share to Google and other search engines and Web destinations that would significantly undermine its revenues, earnings and value," the suit by Lerach Coughlin Stoia Geller Rudman & Robbins LLP states. The firm is seeking class-action status on behalf of a wide class of shareholders.

On July 19, 2006, Yahoo's stock price fell 22 percent after the company announced second-quarter 2006 financial results that were lower than investors expected and analysts downgraded the shares, erasing billions of dollars in market capitalization, according to the suit.

The complaint presents a laundry list of Yahoo's alleged failings. Suits like these appeared by the hundreds after the dotcom bubble burst. Many companies agreed to settlements rather than go through the expense of a defense.

An e-mail to Yahoo's media relations staff seeking comment wasn't immediately returned.

ClickZ Live New York Want to learn more?
Attend ClickZ Live New York March 30 - April 1. With over 15 years' experience delivering industry-leading events, ClickZ Live brings together over 60 expert speakers to offer an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

A Buyer's Guide to Affiliate Management Software

A Buyer's Guide to Affiliate Management Software
Manage your performance marketing with the right solution. Choose a platform that will mutually empower advertisers and media partners!

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

WEBINARS

Jobs