Jim Letourneau's Blog

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YAHOO! Class Action Suit

Every month or two I receive a notice about some class action lawsuit about a stock that went down after people bought it *gasp*. The latest one was more interesting as Yahoo! is the defendant and we know they have deep pockets.

The proposed settlement terms include:

Yahoo! agreed to make changes in its search advertising and disclosures. I put some of the juicy bits in italics.

Yahoo! will pay a $20 refund ("Refund") to eligible Class members who are out of business.

How will they track down businesses that are no longer in existence?

XI. How Will The Lawyers Be Paid? Will The Class Representatives Receive Service Awards?

Class Counsel will apply for attorneys' fees of $4,170,000, plus reimbursement of expenses of approximately $100,000, and for service awards to the three Class Representatives of $10,000 each. Yahoo! has agreed to pay those fees, expenses and service awards, in the total amount of $4.3 million, in addition to providing the other settlement benefits described above in Section VI. Attorneys' fees, reimbursement of costs, and service awards to Class Representatives must be approved by the Court.

I hope everyone is happy with the settlement. Holding Yahoo!'s feet to the fire on pay-per-click quality issues is good for advertising consumers but I wonder if marketplace competition might have led to the same outcome at less cost.

You can find out more about the lawsuit here.