Private eye sues Google over 'unwanted ads'

Lawyers acting for an American private detective claim hundreds of thousands of companies that signed up to advertise on Google might have been deceived into paying for adverts they did not want. The private detective has launched a legal action against the search engine, and his attorneys want the lawsuit to become a class action, which could cost the company millions of dollars if he is successful.

David Almeida said he signed up his firm, Bay State Detective Agency, as an advertiser on Google in 2006 – one of millions of small businesses that have found a cheap means of targeting advertising at people who are genuinely searching for their services. However, he wanted the ads to appear only on Google's own site, not the thousands of other websites, from MySpace to personal blogs, on which Google serves up the ads.

Google had revenues of $1.7bn (£860m) from ads placed on third-party websites in the first three months of this year alone, a third of all its income. The company charges a fee every time someone clicks on the ad.

Mr Almeida's lawyers, at the firm Kabateck Brown Kellner, believe hundreds of thousands of advertisers have been charged for ads on websites where they didn't want them, and they believe they can build a class action of significant size.

"This affects the little guy, the first-time advertiser, the ones who are most vulnerable," said Brian Kabateck. "They think they are buying ads on Google and they are getting only Google, but they are losing control of their ad campaigns and ... paying for ads that do them no good."

Google said it would not comment until it had been formally served with the lawsuit.

Mr Almeida has been a private investigator in Boston, Massachusetts, for more than a decade and tried advertising his services on Google for the first time in November 2006.

When advertisers sign up to Google's advertising service, they can set a maximum price they will pay for ads next to Google's search engine results, but are told that setting a price for ads on other websites is optional. Mr Almeida said he reasonably assumed leaving it blank would mean his ad didn't appear at all and that he wouldn't be charged.

"By redefining the universally understood meaning of an input form left blank, and then intentionally concealing this redefinition, Google has fraudulently taken millions of dollars," Mr Almeida alleges in the lawsuit, filed in a California court last Tuesday.

Kabateck Brown Kellner has fought Google before, over "click fraud", where advertisers are billed for fruitless traffic generated from someone who repeatedly clicks on an ad with no intention of buying. Google paid $90m in a settlement in 2006.

Microsoft mulls options as Yahoo deadline passes

Microsoft's deadline for Yahoo to come to the negotiating table to discuss its $45bn (£22.7bn) takeover bid came and went on Saturday with no movement from either side.

Steve Ballmer, Microsoft's chief executive, was last night examining whether to go ahead with his threat to take the offer directly to Yahoo shareholders by launching an attempt to oust its board. Yahoo, meanwhile, is maintaining private contacts with Microsoft's advisers, aimed at securing the promise of a higher price.

Mr Ballmer has been pursuing Yahoo for more than 18 months, believing its combination with Microsoft's MSN internet business is the only way the two can challenge Google's dominance of the online advertising market. It is almost three months since Mr Ballmer made his latest cash-and-shares offer public in the hope of bouncing Yahoo's board into agreement. Analysts believe Yahoo shares could drop by more than a third if Microsoft withdraws its offer, but they believe the software giant is willing and able to pay more.

Earlier this month, in a letter to Jerry Yang, his opposite number at Yahoo, Steve Ballmer set 26 April as a deadline for talks.

Stephen Foley

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