Google has filed a lawsuit against an Internet marketing firm, claiming the company defrauded Google's advertising network with false ad clicks. The lawsuit alleges that Texas-based Auctions Expert International signed up to display Google's text advertising on its site, and then fraudulently clicked on ads to exploit Google's pay-per-click payment system. According to Google's filing, Auctions Expert created its site and signed up for Google's programs with the sole intention of collecting advertiser fees through false clicks.

Problem Child
Filed November 15th in California, Google's civil case is one of the first involving click fraud, although the subject has been discussed frequently over the past few years by search engine marketing firms and others in the industry. In March 2004, click fraud was brought into the spotlight when a California man was arrested and charged with extortion and wire fraud in connection with developing Google Clique, software designed to automatically click on paid ads. In its SEC filing a month later, Google noted that the company was at risk of fraudulent clicks on its ad network, adding that it has regularly paid refunds related to the practice. Google also reported that it expects such refunds to increase.

Few Solutions
Beyond taking fraudsters to court, as it has with Auctions Expert International, Google may find it has a tough job ahead in stopping click fraud. "As long as there are marketers, there will be interest in gaming the system, especially around advertising," Meta Group analyst Tim Hickernell told NewsFactor. "Google is going to have to constantly stay ahead." For every tweak and new feature that search engine vendors make, there will be a set of marketers trying to figure out how to exploit it, Hickernell added. Although this may cause pain for Google, such difficulties could have a bright side, in keeping search technology advancing forward. "Problems like this keep search engine companies fresh, and force them to review their algorithms," said Hickernell. "Ultimately, that benefits users."

Wrong Focus
Some in the marketing community are not so convinced that Google's motives in the lawsuit are as straightforward as they seem. "I'm glad this is being pursued in court, because it absolutely should be," said Jessie Stricchiola, president of Alchemist Media, a company that has been handling click fraud for a number of years. "However, I think this particular action by Google is a strategically political move within the industry that deflects attention from how the company isn't as proactive with their advertiser relationships as they should be," she told NewsFactor.

Taking Auctions Expert to court is important, said Stricchiola, but in her opinion, Google should be spending more time on resolving issues with refunds and technology for its advertisers. "This lawsuit is a deflection from the fact that their technology is not as good as they say," she said. "They're putting their attention in the wrong place."