[1] Click fraud is a very big problem for Google and other online advertisement companies. A settlement is near in a lawsuit against Google. The plaintiff, Lane's Gifts, will probably receive $90 million from Google [2] in the form of credits to buy Google ads.
It's in Google interests to actively combat click fraud, and that's what their experts are doing, based on multiple factors (IP [3], time, patterns, AI methods etc). Of course, they wont share too many details, to make the job harder for the bad guys.
Google published informations about the Lane's Gifts vs Google case [4], but also more information about click frauds on its adwords blogs (Invalid Clicks [5], About invalid clicks [6]).
Most of the fraudulent clicks should be detected by Google and not be counted for advertisers. If advertisers can find bad clicks and prove it to Google, they'll probably get money back too, according to official Google informations.
Investors arent happy with this story. It seems that Eric Schmidt [7] told analysts that click frauds are mainly "immaterial" [8]. But $90 million doesn't really sound "immaterial" to their hears. This was reflected in the GOOG shares, going down again [9].
Investors would like Google to provide guidance information [10], something Google choosed not to do, until now. Perhaps Google will have to do more than "just dont be evil" and behave more like other big companies dealing with Wall Street analysts. This seems mandatory to avoid too volatile GOOG actions, as we've seen recently...
Refs
- SearchEngineWatch [11]: Google Agrees To $90 Million Settlement In Class Action Lawsuit Over Click Fraud [12]
- Google Blog [13]: Update: Lane’s Gifts v. Google [14]
- Adwords Blog [15]: Invalid Clicks [16]
- Inside Adwords Blog [17]: About invalid clicks [18]
- Business Times [19]: Google faces Wall Street revolt after blunders hit share price [20]
- Business Week [21]: Gauging Google's Gaffes [22]
- Yahoo! Finance [23]: GOOGLE Basic Chart (5days) [24]