Computer Crime Research Center


Google's profits threatened by click fraud

Date: June 26, 2006
By: Mark Veverk

Click fraud can be hazardous to your portfolio – and becomes more so each day. That warning should run as a red alert to investors about to buy shares of any internet search engine, especially Google. For a more noxious breed of “networked click-fraud bots” are here – an invisible electronic army of merry fraudsters that could take a serious slice off Google’s stratospheric share price.

With Google trading at 31 times 2007 earnings, lofty expectations for the continued prosperity of pay-for-click advertising are baked into Google’s $390 share price. At this level, any disruption to the paid-search revenue stream that fuels Google’s shares might be like Kryptonite to the internet giant – because Google is mainlining paid-search advertising. Online advertising accounts for some 99% of the company’s gross revenue.

Click fraud occurs when a person or computer programme clicks on an internet ad to generate a fake or improper charge per click. The fraud, as perpetrated either by programmes or by humans at so-called click farms, has been suspected for a while. But the newer, meaner hacker-injected “bots” – automated programmes that make the scamming faster and easier – are on the rise.

Normally, an advertiser is charged by the number of clicks recorded by a website or advertising network that sells the space. But when click rates are inflated by fraudulent means, then websites such as Google, Yahoo and others end up charging inflated rates.
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2008-01-28 22:21:06 - BEWARE!!!! Any one who tells you they can... Tamy
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