By Leslie Walker
Washington Post Staff Writer Thursday, June 27, 2002; Page E06
A group of Web publishers filed suit in federal court this week against the scrappy Internet ad network Gator Corp., charging that Gator sells ads on their Web sites without authorization and pockets the proceeds.
"Gator Corp. is essentially a parasite that free rides on the hard work and investment" of the publishers, said the lawsuit, filed Tuesday by a dozen large publishers in U.S. District Court in Alexandria.
The irate publishers include The Washington Post Co., the New York Times Co., Dow Jones & Co., Tribune Interactive, Gannett Co., Knight Ridder Digital, Condenet and American City Business Journals Inc.
Their complaint is the latest in a series of legal scrapes involving Gator, which offers consumers free software and, in exchange, displays ads on the screens of their computers.
In a similar court action earlier this month, one of Gator's advertisers, DietWatch.com, was ordered to stop displaying ads that appeared when Gator users visited rival site WeightWatchers.com. The court ordered DietWatch to pay $25,000 to Weight Watchers.
The complaints reflect growing turmoil in the Internet advertising industry, which increasingly has embraced intrusive, flashy and experimental ad tactics as online advertisers try harder to lure customers.
Among the most confusing ad tactics are pop-ups, in which a browser window suddenly opens to display a commercial message. Often consumers can't tell where the ad originated; they assume it came from whatever page they are viewing.
The publishers charge that Gator takes advantage of this confusion and offers to sell ads that appear when Gator users visit specific Web sites, even though those Web sites haven't authorized the ads. Gator accomplishes that with its own software, which displays ads, the suit says.
Gator, based in Redwood City, Calif., did not return repeated e-mail messages and phone calls yesterday.
Terence Ross, the lawyer representing the publishers, said the placement of pop-up ads on the publishers' Web sites "alters the display of the Web site, which constitutes copyright infringement." The suit alleges that Gator's pop-ups also represent trademark infringements and misappropriation of the news.
They also represent unfair competition, the suit says, because Gator's competing offer to advertisers makes it harder for publishers to sell their own ads.
Gator ranked as the 15th most heavily trafficked Web property in April, according to Nielsen/NetRatings, with nearly 16 million people being exposed to its Web sites or software.
Gator offers a "digital wallet" that stores people's addresses and credit card numbers and allows people to fill out forms quickly. When users install the wallet, they get a special "OfferCompanion" that displays ads on their screens. The OfferCompanion, a type of software known as spyware or adware, also is installed when people download the popular file-sharing program KaZaa and a music program called AudioGalaxy.
Gator has wrangled in court with the Interactive Advertising Bureau, an Internet ad trade group, but agreed six months ago to work toward a settlement. Gator had sued the IAB after the trade group threatened to complain to federal regulators about its ad tactics.
