ClickFraud Under the Spotlight
For a company whose prime revenue is based on ads, one wonders when all the fraud issues around its primary source of revenue will ever hit its bottom line — or ever reflect in its share price. Does exuberance create a teflon shield protecting Google’s P/E ratio?
Well, the issue isn’t escaping off-line notice.
The Washington Post today does a nice piece on click-fraud as how it applies to Google (and Yahoo). What’s particularly “shocking”, if anyone is still innocent after the Edelman debacle, is how institutionalized and brazen it is.
Park is one of thousands of people around the world who receive e-mailed lists of Web sites every day to click on for cash. Operators of these fast-growing “pay to read” networks and similar “pay to click” rings say they provide a genuine audience for advertisers, but Internet fraud experts disagree. They say the networks fuel click fraud, which means using bogus clicks to pump up revenue artificially for search engines and their affiliated Web sites.
While it must be nice to have so much money that people start wondering if you’re going to buy a space shuttle, one wonders when Wall Street will ever start asking real questions about a company where up to 30 percent of their revenue stream might be fraudulent — that is, not just fake, but open up to litigation.
