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November 23, 2007

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The court filing of Lane's Gifts can be found at http://blog.ericgoldman.org/archives/lanegiftsac.pdf . There isn't anything in the filing that says (explicitly) what Lane's Gifts believed they were victims of click fraud. However, there are common complaints of suspicious clicks, such as those outlined at the Wikipedia click fraud page (http://en.wikipedia.org/wiki/Click_fraud). If the pattern of clicks was not "obviously fraudulent" (such as the examples you gave), one could argue that Lane's Gifts might have reached an alternate conclusion, namely that the clicks were due to poorly designed sites or high prices. OTOH, fraudsters are aware that people do not convert (buy goods, or at least, sign up for more information) for such reasons, so they are able to mimic the actions of legitimate (but nonconverting) clickers through the usage of automated and manual means.

I wrote on this awhile back in: Click Fraud = Friction for Google http://investing.curiouscatblog.net/2006/10/22/click-fraud-friction-for-google/. My main point was click fraud acts as friction to Google's service (providing customers to those paying for clicks). Google's engineers have made a great deal of money by creating a system that is efficient and leaves room for Google to profit nicely from the difference between the value of the visitors provided to Google's customers and the cost of providing those customers to Google. Click fraud essentially transfers (in the long term) some of the value to those practicing click fraud that otherwise Google would be able to claim a portion of. For that reason I can't see Google doing anything other than trying to reduce click fraud.

Domain parking is a bit different as there the customer delivered to Google's customer may well be profitable to them. There are issues in the domain parking area to address, I am just saying it doesn't quite match the friction argument.

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