Things must be going pretty good at Google. It seems that the web giant pays $1 billion a year in “click fraud” or false clicks on it’s ad services.
Google’s AdWords programs were a relief to the banner ads of a few years ago. The service paired text based ads with the content of the page being visited. When a visitor clicks on an ad the web host gets paid. This works great for Google, webmasters, and surfers. Not so fast.
Google says less than 10% of the ads showed on AdWords are invalid. That adds up to about $100 million a year in revenue the company can not make. If the link does not work, Google doesn’t charge the advertiser so Google “eats” those invalid click-throughs.
Google settled a lawsuit last July (2006) for $90 million and about $60 million in credits to its advertisers in credits for click-fraud. Although spokespeople at Google say they are taking click-fraud “very seriously” they aren’t hurting with all that lost revenue.
Google has the power, money, and technology to take care of these click-frauds, but doesn’t seem to be doing a whole lot about it.
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