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 © 2025 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

Creator of Hentaied, Parasited Launches New Site 'MonsterPorn'

Romero Mr. Alien, the creator of Parasited and Hentaied, has launched new paysite MonsterPorn.com.

House of Lords Approves UK Plan to Outlaw 'Choking' Content

The House of Lords, the U.K.’s upper house of Parliament, has agreed to amendments to the pending Crime and Policing Bill that would make depicting “choking” in pornography illegal and designate it a “priority offense” under the Online Safety Act.

Indiana Sues Aylo Over AV, Calls IP Address Blocking 'Insufficient'

Indiana Attorney General Todd Rokita has filed a lawsuit against Aylo, alleging that the company and its affiliates have violated both Indiana’s age verification law and the state’s Deceptive Consumer Sales Act.

House Committee Amends, Advances Federal AV Bill

A U.S. House of Representatives subcommittee voted Thursday to amend the SCREEN Act, which would make site-based age verification of users seeking to access adult content federal law, and to advance the bill for review by the full Committee on Energy and Commerce.

New AI Companion Platform 'SinfulXAI' Launches

SinfulXAI, a new AI companion platform, has officially launched.

FSC 2026/2027 Board Members Announced

The Free Speech Coalition (FSC) has announced the results of its 2026/2027 Board of Directors election.

Report: AVS Group Beefs Up AV After $1.3 Million Fine

Adult content provider AVS Group has begun to institute robust age checks on some of its websites after U.K. media regulator Ofcom last week imposed a penalty of approximately $1.3 million for noncompliance with Online Safety Act regulations, the BBC is reporting.

FSC: Federal Report Confirms Unfair Banking Discrimination Against Adult Industry

The Free Speech Coalition (FSC) today announced that a federal report on debanking has concluded that several U.S. banks engaged in discriminatory banking practices against members of the adult industry.

Pineapple Support Names Natalie Pereira Executive Assistant

Pineapple Support has appointed Natalie Pereira as its new executive assistant.

AEBN Publishes Popular Searches by Country for October, November

AEBN has released the list of popular searches from its straight and gay theaters by country in October and November.

Show More