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Yahoo accused of censoring ad

Yahoo is accused of censorship after rejecting an advertisement that supported California's pro-litigation Proposition 211.

Advertisements supporting California's controversial pro-litigation initiative will not appear on Yahoo's (YHOO) Web site today, prompting cries of censorship from the bill's supporters.

Citizens for Retirement Protection and Security, which has sponsored a proposal to strengthen shareholders' ability to sue companies over investments gone awry, said it had agreed to pay $1,000 for two weeks of ads on Yahoo's site, starting today. Yesterday, the plans changed when the search engine company informed the group in a letter that it had rejected the ad for Proposition 211, according to a report by Bloomberg news service.

The incident is the latest skirmish in what has shaped up as the most expensive advertising battle in California's campaign history. The CRPS group and their opponents, who have formed Taxpayers Against Frivolous Lawsuits, have raised a total of $32 million.

Yahoo has joined other high-technology firms in vociferous opposition to Prop. 211 and has donated $25,000 to an opposition group.

A Yahoo spokesman quoted in the story said the popular search engine and directory service is talking to both groups about the possibility of running ads in tandem so that visitors to the site will be presented with both sides of the debate at the same time.

Prop. 211 would make it easier for investors to sue companies for making fradulent statements. Many California-based high-tech companies have threatened to stop providing shareholders with financial forecasts if the initiative, on the state's November ballot, is approved.