Reed Elsevier and Microsoft in battle over net ad revenue

Reed Elsevier is locked in a legal wrangle with Microsoft over advertising revenue on a travel website.

Reed Elsevier is locked in a legal wrangle with Microsoft over

advertising revenue on a travel website.



Reed had been collaborating with Microsoft on the software giant’s

Expedia site, providing information for an online hotel directory via

its Cahners division. Now Reed says Microsoft violated an agreement

signed in 1998 under which Microsoft and Cahners were supposed to split

revenue from hotel-related advertising.



While full details of the row have not been released, it is understood

that Cahners is claiming it has not got its full cut. Reed Elsevier has

filed a lawsuit against Microsoft and Expedia in the US.



A spokesperson for London-based Reed Elsevier said she could not comment

on what was ’essentially a trade issue being contested in the US’. She

added that the company did not know when the case would go to trial.



Reed claims Microsoft and Expedia breached their obligations to Cahners,

including violating Cahners’ exclusive right to sell hotel-related ad

space on the site. It is seeking monetary and punitive damages, as well

as an injunction prohibiting Microsoft selling hotel directory

advertising in the future.



The lawsuit also alleges conversion and misappropriation of Cahners’

hotel database and unfair competition.



Expedia publicly disclosed the lawsuit in a regulatory filing with the

US Securities and Exchange Commission, in connection with its initial

public offering. Expedia described the legal action as ’unfortunate’.