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2/15/2005
  Click Fraud - a lot bigger than you think?
The AP covers click fraud:
"Click fraud exists, but it's mostly a big paranoia," said Chris Churchill, chief executive of Fathom Online, a San Francisco firm that studies the spending patterns on search engine ads.

Others believe anywhere from 10 percent to 20 percent of the clicks are made under false pretenses.

This article from CNet also cites several sources in the 10-20% range.

But what about last Thursday, Feb 10? Anyone notice 50% more clicks than usual on their Google AdWords campaigns? Random? It wouldn't be too odd if click spam could reach 3X normal levels on a peak day.

In any case, Google's current stance is precarious. Here is a recent quote from the CEO:

"We are always worried about it, but it hasn't been a material issue so far," said Google chief executive Eric Schmidt.

Basically: "Move on. Nothing to see here." Attempting to keep a lid on anything untoward... If the pundits are saying 10-20%, and on a given day it could be 50%+, how long will Eric Schmidt be able to honestly say "it hasn't been a material issue" ? I'm pretty sure he knows who William Lerach is.

PREDICTION: Click fraud will be a HUGE problem for Google this year. Since almost all of their revenue comes from AdWords, the stock could be very vulnerable to any real or perceived threat to that revenue. Google doesn't have THE answer just yet...

 


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