GOOGLE AND THE ‘CLICK FRAUD’ MENACE

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Internet search giants like Google and Yahoo! know that click fraud poses a threat to their business. In December 2004 at an investor conference, Google’s Chief Financial Officer George Reyes had admitted to the threat of click fraud to Google’s business. He said, “I think something has to be done about this (click fraud) really, really quickly, because I think, potentially, it threatens our business model.”^[8]

Helping online advertisers counter the threat of click fraud has become a hot business opportunity. Many internet marketing and search engine optimization firms offer consulting services and software products that help detect and prevent click fraud. In response to the settlement announcement, Google put out another post on its official AdWords blog regarding the company’s response to click fraud.

With reference to the specific methods used by Google to identify invalid clicks, Shuman Ghosemajumder, Business Product Manager for Trust & Safety at Google, said, “There are many things we do to detect invalid clicks, including looking at duplicate IP addresses, user session information, network information, geo-targeting and browser information. These are all important signals for detecting invalid clicks.”^[9]

He further added, “The technology we use to detect invalid clicks is highly sophisticated and was developed by some of the world's leading experts -- PhDs in artificial intelligence, machine learning, and statistics. We’re reluctant to share more about our technology and methods, however, because doing so would make it easier for fraudsters to try to defeat our systems.”^[10]

Though many analysts believed that Google seemed to have sent a message that click fraud is a relatively small issue, given the size of the settlement amount when compared to the company’s overall revenues, they felt that the problem of click fraud would not go away so easily. Chuck Richard, an analyst with research and consultancy firm Outsell, said, “It’s a mistake to equate the relative trivial size of the settlement to any indication of what click fraud actually is. This is a significantly heated subject, and the advertisers don’t feel like it is getting the proper attention from Google, Yahoo! or Microsoft’s MSN.”^[11]
 

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^[8] Krysten Crawford, “Google CFO: Fraud a big threat,” http://money.cnn.com/2004/12/02/technology/google_fraud/?cnn=yes, December 2, 2004.

^[9] http://adwords.blogspot.com/2006/03/about-invalid-clicks.html, March 08, 2006.

^[10] http://adwords.blogspot.com/2006/03/about-invalid-clicks.html, March 08, 2006.

^[11] Chris Kraeuter, “Why Click Fraud Questions Won’t Stop,” http://www.forbes.com/home/technology/2006/03/09/google-yahoo-fraud-cx_ck_0309googlefraud.html, March 09, 2006.