Google, Others Face Click Fraud Charges

TEXARKANA, Ark. — After more than a year of rumor and speculation on message boards and in the online press, news broke Tuesday of a class action lawsuit accusing search engines Google and Yahoo as well as several other web companies of click fraud.

Led by retailer Lane’s Gifts & Collectibles, the plaintiffs allege that they have been overpaying for advertising due to illegitimate hits on their links and banners and that search sites were aware of the problem but continued to overcharge them.

The suit names as defendants Google, Yahoo, Ask Jeeves, Time Warner (AOL), Walt Disney, Ask Jeeves, Daum Communications (Lycos), LookSmart and FindWhat.

Online merchants have quietly complained for some time that bogus click stats cost them tens of thousands of dollars each year, but fear of blacklisting by major search engines have prevented them from going public about the issue or pursuing compensation.

In March, CNet News ran a story about a Search Engine Strategies conference in which audience members sheepishly admitted to losing as much as $300,000 paying for thousands of clicks with almost no conversions.

“This fraud is part of doing business, because if you start suing these search engines, they'll cut off your traffic,” one audience member said.

With sponsored link fees running anywhere from 50 cents to $10 per click, analysts say the industry is ripe for fraud.

John Squire, product marketing vice president at web analytics firm Coremetrics, estimated that his company's clients, which include online merchants such as Eddie Bauer, OfficeMax and CompUSA, were spending about $10 million a year on fraudulent clicks.

“It's a billion-dollar problem,” said Tom McGovern, president of search engine Snap.com.

Click stats can be inflated in several ways, from simply clicking on the same ad or link repeatedly to using sophisticated bots to automate the clicking. A Wall Street Journal article on the subject said industry experts estimate that fraud is responsible for as much as 20 percent of all clicks.

In cases that have been successfully traced back to the source of the fraudulent activity, perpetrators are most often found to be either companies seeking to eat into a competitor’s pay-per-click ad budget or, less frequently, search engine ad affiliates hoping to boost their payout.

Either way, merchants end up paying more than they should, with little return on their investment. And now, they want search companies to be held liable for the fraudulent charges.

However, most search engines claim to have antifraud mechanisms in place and to issue refunds whenever they find evidence of artificially exaggerated click results.

None of the companies named as defendants in the suit have issued public comments, but AskJeeves stated in a public filing last month that it intends to defend the lawsuit vigorously.

Also, in a recent quarterly report, Google admitted that click fraud is a problem on the site but said it reimburses victims for lost revenues.

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Atlanta Authorities Renew Attack on Adult Boutique Tokyo Valentino

The saga of beleaguered Georgia adult boutique Tokyo Valentino continues with a renewed attempt by authorities to shut down another of its locations.

MomPOV Producer Pleads Guilty in GirlsDoPorn Case

MomPOV producer Doug Wiederhold, who was formerly the partner of GirlsDoPorn owner Michael Pratt as well as the first male talent for GDP, pleaded guilty Thursday to a federal conspiracy charge.

Streamate Exec Liz Rek Joins FSC Board

The Free Speech Coalition board of directors has tapped Streamate executive Liz Rek as its newest member, effective immediately.

2024 XBIZ Creator Awards Nominees Announced; Voting Now Live

XBIZ is pleased to announce the nominees for the 2024 XBIZ Creator Awards, presented by Fansly.

Adult Site Broker Talk's Bruce Friedman Reflects on Podcast Success

The 200th episode of “Adult Site Broker Talk” will air next week, with 2023 XBIZ Performer of the Year Cherie DeVille as the featured guest.

FSC Asks Supreme Court to Overturn 5th Circuit Decision, Strike Texas' Age Verification Law

Free Speech Coalition (FSC) filed a petition for certiorari on Friday asking the U.S. Supreme Court to overturn the Fifth Circuit panel decision that partially upheld Texas’ controversial age verification law.

Details Emerge About Capture, Arrest of GirlsDoPorn's Michael Pratt

Further details have emerged in the past week about the capture and arrest of GirlsDoPorn owner Michael Pratt in Spain in December 2022, following his extradition to the U.S. last month.

Magdalene St. Michaels, Andy Rodrigues Named as AEBN Top Stars for Q1 of 2024

AEBN has announced its top-selling stars for the first quarter of 2024, with Magdalene St. Michaels landing atop the leader board for straight theaters and Andy Rodrigues heading up the gay rankings.

YouPay Partners With IP Security Solution Sidenty

Australian gifting platform YouPay has joined forces with IP security solution Sidenty to help creators guard against online theft and unauthorized use of their content.

Grooby Launches Fetish Site 'Joey's Trans Feet Girls'

Grooby has debuted Joey's Trans Feet Girls, a new fetish membership site featuring foot content by top trans performers.

Show More