Monday, March 13, 2006

Follow Up: Google Settles Lanes Collectibles Click Fraud Lawsuit

Well Danny Sullivan beat me by an hour or so with breaking the news last week and now its all over the web radar. Here is the low-down:

Google says that in the entire world there is only 1% of all click fraud activity that they are unable to detect. In addition, over a four year period, Google says that amounts to $90mm dollars.

Hogwash. Heres the between-the-lines for you for Google:

1. We lost our appeal to have the case go to a federal court (that clearly favors large corporations) where we could drag this thing out forever with appeal after appeal.

2. We then lost our appeal to not have to show any data or allow anyone to look at what we actually do to detect and prevent click fraud.

3. We have been losing billions of dollars in market capital.


We decided to throw (very little) money at the problem to see if would go away so we wouldn't:

1. Wind up losing the case
2. Lose a few billion more in market capital
3. Have to show any click fraud experts (who actually have experience in dealing with this day in and day out) our data or what we actually do to detect and prevent click fraud
4. Have to pay out to more lawsuits (unless adverisers opt out of the proposed settlement)
5. So we could: Get to use our spin doctors to say that agreeing to this settlement means there is only 1% of all click fraud we aren't able to detect

Wow. Sounds like a good deal for Google. But what about advertisers? This settlement makes no concessions to changing a system that is shrouded in secrecy and conflicting interests. Google still holds all of their information close to vest. They wont share all of the client's own information much less their own or their methodologies for protecting advertiser's marketing dollars.

Unfortunately it doesn't look like most advertisers will get most of the money they lost back. Whats worse, advertisers only get credits back to use in the Adwords system. So that means advertisers have no choice but to lose even portions of that money to click fraud in the future and it won't be the 1% that Google is spinning.


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