Google agrees to pay $90 mln in click fraud suit

[POLiSH]

Reuters: http://today.reuters.com/business/ne...CKFRAUD-DC.XML

Wed Mar 8, 2006 7:04 PM ET

SAN DIEGO (Reuters) - Web search leader Google Inc. (GOOG.O: Quote, Profile, Research) said on Wednesday it had agreed to pay up to $90 million to settle a class action lawsuit over advertising fraud by outside parties on its site, in a bid to put the controversy behind it.

The settlement stems from a lawsuit filed by Lane's Gifts earlier this year in an Arkansas state court and is designed to settle all outstanding claims against Google for fraud committed using its pay-per-click ad system back to 2002, it said.

The $90 million would involve legal fees and credits -- rather than any cash payments -- to all advertisers who apply to be part of the class settlement, once the judge certifies the agreement, Google spokesman Steve Langdon said.

The case covers all advertisers using Google's pay-per-click advertising system back to February 2002 through the date when the judge certifies the case. The final settlement hearing is expected to take place in coming weeks.

The vast majority of Google's revenues, or around 97 percent, are the result of pay-per-click ads, which critics say can be vulnerable to fraud.

Bearish analysts have harped on the threat of click fraud as the single greatest risk to Google's advertising-dependent business model, although the company has downplayed the risk, saying only a small percentage of search ads are fraudulent.

[Jacksplat]

Now I can say I'm not paranoid. It's too easy for them to do it, and it must be tempting too. And as well for parking sites and all other similar business's.

There needs to be a third person panel to audit all of them. Payment of course should come from their profits. Which wouldnt put a dent in it.

I've got at least a thousand names parked or in ppc.. and i depend completely on their honesty. But that gets me nowhere. I might work on getting my own service. Anyone know what's involved in setting up your own parking site ?

Software, etc....

[statusx]

The article in the link above does not explain clearly what has happend.
The fraud was not commited by google, it was commited by users clicking on ads on their sites to generate revenue or companies clicking on their
competitors ads to make them pay money for nothing. This was causing people to pay money for advertising that they had no benefit from because people were clicking on their ads for reasons other than buying the product or service advertised.
Google merely failed to prevent this type of fraud and was sued for damages.

Here is a link with more info

http://money.cnn.com/2004/12/02/tech...fraud/?cnn=yes

[stevesko]

As I understand it there is a 90 million pool to compensate advertisers.

Well, I've spent 800K at google, I'm putting in for a 200K credit. I think 25% is prety conservative.

Steve