Media firm says ‘Damn You’ after paying too much for Auto Correct site

Damn You Auto Correct is a website that collects embarrassing text messages that arise when smartphones replace simple spelling errors with something more awkward — such as “anal” when a person meant to write “a nap” or “lesbian” for “Lauren.”

DYAC’s most famous bloopers have become perennial Facebook(s fb) favorites and the source of hilarious year end lists. Here is one well-publicized example:

DYAC autocorrect screenshot

Such fare is popular with anyone who has suffered an embarrassing auto-correct, helping the DYAC site become a well-known brand. The site has not been a hit, however, with its new owners, who claim they got stiffed after they bought it last February.

According to owner Break Media, which also owns a collection of college humor websites, the number of visitors to the site dropped off dramatically and the number of user submissions dropped from 150 a day to 100 shortly after it acquired the site. In court papers, the company accused the previous owners of inflating the site’s popularity by buying traffic and by publishing fake text messages.

In a late December court decision, a federal judge rejected the accusations. The judge concluded instead that the decline in popularity was more likely the result of poor editorial and site management decisions, and pointed to a Break Media admission that “the editor I put in charge of most of the tumblers (sic) had gone far off the rails, posting images that were neither fun nor funny.”

As a result, the judge ordered Break Media to hand over $1 million of the purchase price it had had been holding back. Under the contract, the company agreed to pay $2.5 million in total for Damn You Auto Correct and about a dozen other lesser known sites like “Really ghetto” and “Parent fails.”

Break Media’s SVP of Marketing, Andy Tu, explained in a phone interview this week that the parties have now resolved the lawsuit. He added that Break has doubled the social media popularity of DYAC and also started a “damn you” merchandising line with desk calendars and a board game.

Media and legal types who want more details — check out the great analysis of the case by social media lawyers Venkat Balasubramani and Eric Goldman who were first to report it on the Technology and Marketing Law blog.