Suit Over Gator's Pop-Up Ads Settled

(CBS)  The nation's largest news publishers have settled a dispute over an Internet advertising practice in which unauthorized, third-party ads pop up on nytimes.com and other news sites.

Terence Ross, the lead attorney for the publishers, on Friday declined to release terms of the settlement reached this week.

The parent companies of The New York Times, USA Today, The Wall Street Journal and The Washington Post and the digital arms of Knight Ridder and Conde Nast were among news outlets that sued Gator Corp. in June over its pop-up ads.

U.S. District Judge Claude Hilton in Alexandria, Va., granted a preliminary injunction ordering Gator to stop delivering pop-up ads at the sites run by those companies. Trial was to begin last month.

Ross would not say whether Gator can still serve pop-up ads over the news sites, or whether the settlement included any payments. Officials at Gator, based in Redwood City, Calif., did not return calls or e-mail.

Internet users get Gator advertising software when they install a separate product for filling out online forms and remembering passwords. Gator also comes hitched with free software from other companies, including games and file-sharing programs.

As users surf the Web, Gator runs in the background and delivers advertisements that plaintiffs said obscured their own ads and content.

Though the Gator ads are marked "GAIN" - for Gator Advertising and Information Network - publishers worried that consumers did not know the difference and would instead blame the site for an unpleasant experience.

Gator, which claims 30 million active users and 500 advertisers, has contended its pop-up windows are no different than what happens when a user runs instant messaging, e-mail or other programs in separate windows while surfing a Web site.

Gator still faces lawsuits from United Parcel Service, which said unauthorized pop-ups have included ads for rival FedEx Corp., and from Six Continents Hotels, which operates Holiday Inn and Crowne Plaza and complains that Gator directed visitors to deals from Marriott and other competitors.