Lycos Sues Overture

Lycos Sues Overture over Contract

Lycos Inc. filed suit against paid search publisher Overture, now owned by Yahoo, and has stopped using Overture’s text advertisements on its Web-search pages. Lycos is now using paid listings from Google AdWords.

In a complaint filed in Massachusetts federal court on Oct. 17, Lycos, the Web portal unit of Spain’s Terra Lycos, said Overture breached a services agreement requiring Overture to gain Lycos’ consent if control of their relationship were to be turned over to a Lycos competitor.

Lycos said Overture neither sought nor obtained Lycos’ consent to continue their pact when it was bought by Yahoo.

Yahoo’s oversight of the relationship “leaves Lycos in an untenable position by which it is dependent on a major competitor for an essential service,” Lycos said in the complaint. “Overture will inevitably disclose Lycos’ confidential and trade secret information to Yahoo!, and indeed, on information and belief, Overture has already done so.”

Lycos seeks $800,000 in damages which it claims Overture has refused to pay..

Overture renewed its ad-distribution pact with Lycos Inc. during the June quarter, according to an Overture filing with the Securities and Exchange Commission.

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