Google's Wonderland: Trouble In Paradise?

Author: Dean Phillips
Article:The fairy tale existance of Google is starting to experienceshockwaves.
So, what's the source of these shockwaves? Click fraud. As myreaders know, I've written several articles on the subject ofclick fraud, suggesting that since it's the market leader,Google should take a more proactive approach with the problem ofclick fraud.

Until now, Google has been mostly quiet about the subject,issuing this single statement to the Securities and ExchangeCommission: "We are exposed to the risk of fraudulent clicks on our ads. Wehave regularly paid refunds related to fraudulent clicks andexpect to do so in the future. If we are unable to stop thisfraudulent activity, these refunds may increase. If we find newevidence of past fraudulent clicks, we may have to issue refundsretroactively of amounts previously paid to our Google Networkmembers."

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

That theory was echoed in a recent article, in which the authorwrote: "Google's primary defense against click fraud has been to refundadvertisers their money if they complain and Google seesevidence that fraudulent clicks have occured. The problem withthis is that the burden of proof is on the advertiser ... andGoogle knows that most advertisers will not take the time toargue. Therefore, Google has a financial incentive not to dealwith click fraud on their own. It not only costs them to dealwith the problem but if they do find a solution to stoppingclick fraud ... it will cost Google much more when they don'tget paid for 20 percent or more of their clicks."

However, all of that may be about to change. At an investorconference last Wednesday, Google CFO George Reyes stated: "I think something has to be done about this really, reallyquickly, because I think, potentially, it threatens our businessmodel."

My question is this: What took Google so long to come to thatrealization? It's not like click fraud just magically appearedyesterday. The media has been reporting on the problem for atleast the last 3 years.

Smug in its ivory tower, did Google think the problem was justgoing to go away by itself? Or was it waiting for Overture orone 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 moretroubling 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 believeGoogle is serious about eliminating click fraud, when I finallysee it!

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