A new twist on Yahoo click fraud
A Harvard researcher finds that some spyware can actually simulate clicks fraudulently. Plus: Corel files for its second IPO.
SAN FRANCISCO (Business 2.0 Magazine) - Harvard researcher Ben Edelman has been digging into the problem of click fraud in online advertising -- and has found an alarming new development. According to his research, so-called "spyware" and "adware" programs already carry ads from Yahoo (Research), which places the ads on behalf of advertisers, charges them for every click the ads receive, and splits the revenue with its partners. But now Edelman, a respected Internet expert who has consulted for the likes of Wells Fargo (Research) and the NFL, has discovered that some spyware programs actually simulate the click itself -- with the result that advertisers may be paying Yahoo for fake clicks. After he released an earlier report on spyware programs carrying Yahoo ads, Edelman claims Yahoo ended its relationship with those companies, but notes that Yahoo faces a "whack-a-mole" problem in identifying and cutting off fraudsters, who funnel pay-per-click advertising revenues through complex rings of linked websites. RealTechNews points out that while Edelman's study focused on Yahoo, this could be a problem for Google (Research) as well, and applauds Edelman for following the money trail that funds spyware programs.
WordPerfect owner files for IPO
Corel, long suffering maker of WordPerfect, announced on Tuesday that it would file an initial public offering. ArsTechnica notes that this is actually the second time the company has gone public. First publicly traded in 1989, Corel was bought out in 2003 by San Francisco-based Vector Capital after it's attempt to take on Microsoft (Research) in consumer software crashed and burned. Apparently, Vector is now ready to cash in on the investment. Morgan Stanley will underwrite the $83 million NASDAQ offering, though itBusiness.ca points out that some of the Corel faithful are declaring themselves "once bitten, twice shy."
Podcasting hype deflates
On her blog, Forrester Research analyst Charlene Li reports the findings of recent research into podcasting, and the news isn't good for investors who have rushed into the nascent audio medium. Only 1 percent of Internet-using household regularly download and listen to podcasts -- audio files designed for easy playback on PCs or portable MP3 players like Apple's (Research) iPod. More significantly, only one out of four users surveyed expressed any interest in listening to podcasts, and only eight percent of those people expressed any interest in listening to amateur podcasts. The vast majority of podcast listeners -- like Forrester's Li herself -- prefer listening to existing audio content like NPR, using podcasts like the audio equivalent of a VCR to shift their listening to a more convenient time. Blogger Amit Agarwal says that the podcasting bubble has burst, and Publishing 2.0 says that even though new software tools make podcasts easy for anyone to produce, there's no compelling reason for mainstream audiences to start tuning in. For his part, blogger (and podcaster) Kevin Tofel says hedoesn't believe Forrester's numbers.
Online video bubble
While podcasting buzz may be on the wane, the roar about online video is deafening. YouTube has raised another $8 million, and CEO Chad Hurley is declaring the beginning of "a new clip culture." Whenever a CEO claims his company is really a social movement, watch out. It's clear, though, that YouTube's funding is part of a rush of startups into the sector. Motionbox and Jumpcut have joined Grouper, VideoEgg, and others in the race to post the most video clips online.