Yahoo Tied to Direct Revenue Amidst Legal Battle

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New documents coming forth in Eliot Spitzer’s lawsuit against Direct Revenue suggest that Yahoo Search accounted for a sizeable portion of the adware company’s income last spring. According to an email dated June 2, 2005, revenue from Yahoo Search ads totalled $226,964 in April, $193,944 in May, and $180,000 for June.

Walnut, an ad distributor for Yahoo, apparently supplied the ad space to Direct Revenue while the revenue was derived through Overture’s CPC feed. The adware company’s links were displayed in the place of a “404 file not found” error page when a user mistyped a URL.

Although Spitzer has not accused Yahoo of any wrongdoing, the search site continues to deny authorization of any business practices with Direct Revenue. “Yahoo!/Overture has never had a distribution agreement with Direct Revenue, nor have we ever paid Direct Revenue for services,” a Yahoo spokesperson told MediaPost. “They have approached us on several occasions, and we have repeatedly declined their proposals.”

The New York Attorney General’s lawsuit was filed last week. In a related development, a number of other documents attached to Spitzer’s suit are now serving to illustrate the frustration several of Direct Revenue’s business partners communicated to the company when it prepared to unveil its notorious Aurora adware. The emails and other records show Kazaa, Fastclick and others were annoyed by the company’s plans, and threatened on several occasions to sever their business relations.

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