News June 30, 2005
A class action lawsuit was filed
in US District Court against
Google alleging breach of
contract, negligence, unjust
enrichment, and unfair business
practices-all involving charges
of click fraud. Click Defense
Inc, a click fraud protection
firm, filed the suit in
California in the name of an
unknown number of plaintiffs for
an amount not less than $5
million.
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Of course, one should always
consider the plaintiff in any
suit presented. The publicity
gained through this type of
action is worth its weight in
gold--especially to a click
fraud business whose bread and
butter is identifying click
fraud and getting money back for
its clients.
Click fraud is the term used in
the Internet search industry to
describe the practice of
clicking on search
advertisements to run up the
costs on advertisers.
Is this a
publicity stunt or a
legitimate claim?
Discuss Here |
Companies buy an advertisement
through Google's AdWords
program, whereby certain
keywords are purchased in order
to appear in the sponsored links
section of the search engine's
results page.
Advertisers bid upon the search
terms with the top spot going to
the top bidder. Once the
advertisement is in place,
advertisers pay a fee to the
search engine each time the ad
is clicked by a searcher.
Click fraud, estimated by some
to be as high as 20% of all
clicks, is caused by those with
a vested interest using software
that clicks on the ad hundreds
or thousands of times to either
drain the advertising budget of
a rival company, or create
revenue for the seller of the ad
space.
Colorado-based
Click Defense, a company
that specializing in procuring
rebates for advertisers, says
the average cost per click is 50
cents, but prime search engine
real estate can go for as much
as $100. Disputing the 20%
estimations, Click Defense
alleges that click fraud on
Google is as high as 38%.
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The lawsuit claims that
since 99% of Google's revenue
comes from advertising, Google
has a huge financial interest in
doing little about the instance
of fraudulent clicks and
criticizes the search giant for
failure to disclose its own
estimate of the number of
fraudulent clicks.
The suit fall just short of
accusing Google of physically
performing the click fraud
itself. The most visible
allegation is the charge of
negligence on the part of
Google, claiming that Google
isn't doing enough to prevent
the problem.
Click Defense argues that the
same software Google uses to
track the number of clicks on an
advertisement and then bill
advertisers could be used to
investigate and identify
instances of click fraud.
Google's terms of use with
AdWords promises a refund in
any event of identifiable click
fraud. According to Google's
2005 Annual Report, click fraud
is a major concern of the search
engine.
 "If
we fail to detect click-through
fraud, we could lose the
confidence of our advertisers,
thereby causing our business to
suffer," as stated in the
report.
Google, who reported a first
quarter net profit of $1.3
billion, is dismissing the
claims of Click Defense.
"We believe the suit is without
merit and we will defend
ourselves against it
vigorously," a Google spokesman
told Reuters.
It is important to note that
Click Defense Inc. makes money
by promising protection against
click fraud and procuring
refunds for client advertisers.
The plaintiff in this lawsuit
seems especially suspect
considering the nature of the
business it is in.
That Click Defense is accusing
Google of having a financial
interest in not detecting click
fraud is a little bit funny as
Click Defense has a definite
financial interest in nailing
Google for it.
A jury has been demanded to
investigate the claims and they
will ultimately decide, if the
case goes to trial, whether
there is sufficient evidence of
the charges brought against
Google.
About the Author:
Jason L. Miller is a
staff writer for
WebProNews covering
technology and business. |
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