Google's wonderland, Trouble in Paradise

Article:
The fairy tale existance of Google is starting to experience
shockwaves.

So, what's the source of these shockwaves? Click fraud. As my
readers know, I've written several articles on the subject of
click fraud, suggesting that since it's the market leader,
Google should take a more proactive approach with the problem of
click fraud.

Until now, Google has been mostly quiet about the subject,
issuing this single statement to the Securities and Exchange
Commission:

"We are exposed to the risk of fraudulent clicks on our ads. We
have regularly paid refunds related to fraudulent clicks and
expect to do so in the future. If we are unable to stop this
fraudulent activity, these refunds may increase. If we find new
evidence of past fraudulent clicks, we may have to issue refunds
retroactively of amounts previously paid to our Google Network
members."

So, why isn't Google doing more about click fraud? In one of my
articles, I theorized that with the amount of money involved,
it's actually more cost effective for Google to issue an
occasional refund to its advertisers, than to develop technology
to eliminate click fraud.

That theory was echoed in a recent article, in which the author
wrote:

"Google's primary defense against click fraud has been to refund
advertisers their money if they complain and Google sees
evidence that fraudulent clicks have occured. The problem with
this is that the burden of proof is on the advertiser ... and
Google knows that most advertisers will not take the time to
argue. Therefore, Google has a financial incentive not to deal
with click fraud on their own. It not only costs them to deal
with the problem but if they do find a solution to stopping
click fraud ... it will cost Google much more when they don't
get paid for 20 percent or more of their clicks."

However, all of that may be about to change. At an investor
conference last Wednesday, Google CFO George Reyes stated:

"I think something has to be done about this really, really
quickly, because I think, potentially, it threatens our business
model."

My question is this: What took Google so long to come to that
realization? It's not like click fraud just magically appeared
yesterday. The media has been reporting on the problem for at
least the last 3 years.

Smug in its ivory tower, did Google think the problem was just
going to go away by itself? Or was it waiting for Overture or
one of the smaller pay-per-click companies to solve the problem,
so it wouldn't have to deal with it?

These are troubling questions, to say the least. Even more
troubling is Google's passive approach to a serious problem,
which in my opinion has been reprehensible.

It should be interesting to see what Google's next move is.
Google CFO George Reyes statement notwithstanding, I'll believe
Google is serious about eliminating click fraud, when I finally
see it!


About the author:
Dean Phillips is an Internet marketing expert, writer, publisher
and entrepreneur. Questions? Comments? Dean can be reached at
mailto: dean@lets-make-money.net