Yahoo! recently proposed a settlement to all class action claims against itself (defined as Yahoo!, Inc., Yahoo! Search Marketing, Overture Services, Inc., and GoTo.com, Inc.) The proposed settlement and informs claimants of rights as a settlement class person. The settlement covers any Yahoo! customer who paid for advertising services between January 1, 1998 and July 31, 2006. Yahoo! has agreed, under the terms of the Settlement, to provide claimants with the opportunity to submit a valid and timely claim form through which they may be eligible to receive advertising credits.

The settlement is subject to the approval by the Court. If the Court approves the settlement and it becomes effective, claimants will automatically be eligible to submit the Assertion of Right to Participate in Additional Claims Review Process form (hereinafter "Assertion of Right to Participate"), indicating that each claimant intends to file a claim form for Yahoo! advertising credits and will give up ability to sue Yahoo! over the subject matter of this case.

Since filing the action, Plaintiff, through Class Counsel, has conducted an investigation of the facts, including review of Yahoo!’s billing procedures and Yahoo!’s click filtering systems, interviews with key Yahoo! personnel, and has analyzed the relevant legal and factual issues. Class Counsel obtained substantial information about the nature and extent of Yahoo!’s challenged practices through this process.

Although Yahoo! does not believe it has done anything wrong and continues to deny all claims and allegations of wrongdoing asserted in the Action, Plaintiff and Yahoo! agreed to enter into a settlement agreement after an extensive exchange of information and vigorous arms-length negotiation. If approved by the Court, the settlement agreement will result in dismissal of this case and final resolution of all claims raised. Such dismissal will release Yahoo! from future liability for the acts and practices complained of. The settlement terms are described in full in a document known as Stipulation and Settlement Agreement (hereinafter "Agreement")1. The Agreement is available for your inspection at the clerk’s office of the United States District Court, Central District of California, Western Division. The terms of the settlement, in summary form, are as follows:

i) Yahoo! shall launch an online traffic quality center, which will be available to its advertisers within 90 calendar days of the Effective Date of the settlement. The traffic quality center will include a resource center which will contain FAQs, best practices documents, traffic quality articles, enforcement guidelines, and an advice column.

ii) Yahoo! shall designate a Yahoo! employee as a traffic quality advocate who will be part of a traffic quality group to fulfill the function of fielding advertisers’ concerns regarding traffic quality, including its click fraud prevention efforts, within 90 calendar days of the Effective Date of the settlement.

iii) Within 90 calendar days of the Effective Date of the settlement, Yahoo! shall start a program in which it chooses at least three advertisers per year who will be invited to Yahoo! to obtain special access to the traffic quality team and additional information with respect to Yahoo!’s click protection system, subject to the advertisers’ execution of nondisclosure agreements.

iv) Yahoo! shall work with third parties in an effort to develop industry-wide standards that define click fraud, set forth standards with respect to the detection of click fraud and provide the public with periodic general evaluations regarding the effectiveness of providers’ efforts to filter and prevent the charging of click fraud to customers.

v) Yahoo! will temporarily lift its 60-day contractual provision to allow Class Members to make click fraud claims for the period from January 1, 2004 to July 31, 2006. Any Class Member that wishes to participate in the additional claims review process will have to complete the Assertion of Right to Participate form, and mail by certified or registered mail the completed form to the Claims Administrator on or before November 20, 2006.

Class Counsel will request that the Courts award them attorneys’ fees and expenses. They intend to request $4,950,000 in attorneys’ fees plus costs in an amount not to exceed $25,000. The fees and costs figures were determined independently of negotiation of the other terms of the settlement.

Class Counsel’s petition for fees and expenses will be filed with the court no later than October 30, 2006, and may be reviewed by any interested party. The amount paid for attorneys’ fees, expenses, and costs will be paid by Yahoo! and so will not diminish or affect any Credits which Class Members may receive.