Friday, June 30, 2006

Click Fraud approach YAHOO! vs GOOGLE.

How long will google be able to exploit dumb money from advertisers paying for nothing? Can business model be sustained on fraud? - just a few questions to consider about GOOG valuation.

P.S> Apple is in the heat of stock option scandal, will Google join the club? Reestablished put war positions on AAPL today in Europe market.

"Yahoo trumps Google: Yahoo takes the lead in attacking the click fraud problem
Posted by Donna Bogatin @ 5:51 amDigg This!
Yahoo made a public commitment Wednesday to “provide more clarity about our click protection efforts and significantly more transparency to advertisers in the future.” Yahoo’s commitment to publicly fight against click fraud was announced as part of a settlement of a class action lawsuit filed in the U.S. District Court in Los Angeles by Checkmate Strategic Group, Inc.
The suit alleged that Yahoo failed to do enough to track or prevent click fraud. As part of its settlement Yahoo has agreed to:
• One-Time Extended Claims Period: Yahoo! will offer advertisers a one-time extended claims period during which advertisers can submit click fraud claims for clicks dating back through January 2004. If our investigation determines that a credit is due that was not given previously, we will issue a 100% credit, which can be used however the advertiser wishes to use it.
• Dedicated Traffic Quality Advocate: Yahoo! will appoint a Traffic Quality Advocate who will be dedicated entirely to addressing advertiser concerns about click fraud and traffic quality issues. This advocate will serve as the internal voice of the advertiser within Yahoo! on these matters.
• Annual Access to CTP System and Team: To ensure that the advertising community has ongoing visibility into our Clickthrough Protection system, Yahoo! will host a panel of individual advertisers at our CTP headquarters once a year. During these visits, we will allow the advertisers to review our systems, meet with the CTP team and provide feedback on how we can continue to enhance our approach to fighting click fraud.
• Industry-Wide Click Protection Efforts: Yahoo will work with a reputable third party toward building industry-wide efforts to combat click fraud, including development of industry-wide definitions of click fraud and a comprehensive lists of identified bots.
• Traffic Quality Resource Center: Yahoo! will commit technical and human resources to build a Traffic Quality Resource Center, which will provide advertisers with more detailed information about traffic quality issues (including click fraud) and solutions via FAQs, advice columns, best practices guides and additional access to analytics tools.
Additionally, Yahoo commits to:
• Traffic Quality Inquiry Response Times: Yahoo! will provide advertisers who submit click fraud- or traffic quality-related inquiries with a time by which they will receive the results of Yahoo!'s investigation or, if the investigation is particularly complex, a status update.
• Additional Traffic Quality Refund Detail: To provide advertisers with more clarity around refunds for click fraud and other traffic quality issues, Yahoo! will include additional detail in advertiser refund notices.
If Yahoo’s public commitment to prevent, identify and redress click fraud problems is followed by real, meaningful action, it will provide Yahoo with a valuable, differentiating advantage over Google in their ongoing competitive battle.
Google’s response to a class action click fraud lawsuit filed by Lane’s Gifts in Arkansas:
You may remember that last February, Google was sued in Arkansas over what is commonly called click fraud… We’ve been discussing the case with the plaintiffs for some time and have recently come to an agreement with them which we believe is a good outcome for everyone involved… For all eligible invalid clicks, we will offer credits which can be used to purchase new advertising with Google. We do not know how many will apply and receive credits, but under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million…
We have said for some time that we believe we manage the problem of invalid clicks very well. We have a large team of expert engineers and analysts devoted to it. By far, most invalid clicks are caught by our automatic filters and discarded *before* they reach an advertiser’s bill. And for the clicks that are not caught in advance, advertisers can notify Google and ask for reimbursement. We investigate those clicks, and if we determine they were invalid, we reimburse advertisers for them. We will continue to do that, and believe that this settlement is further proof of our willingness to work together with advertisers to reimburse invalid clicks.
Contrast the settlement agreement of Yahoo versus the settlement agreement of Google:
Reimbursement of advertisers
• YAHOO "we will issue a 100% credit, which can be used however the advertiser wishes to use it."
• GOOGLE "we will offer credits which can be used to purchase new advertising with Google."
Acknowledgement of click fraud problem
• YAHOO Detailed six-prong, plan (outlined above) to “move forward to work more closely with our advertisers and others across the industry to fight click fraud.”
• GOOGLE “We have said for some time that we believe we manage the problem of invalid clicks very well…for the clicks that are not caught in advance, advertisers can notify Google and ask for reimbursement… believe that this settlement is further proof of our willingness to work together with advertisers to reimburse invalid clicks.”"

Thursday, June 29, 2006

Google is pure arrogance compare to Yahoo click fraud approach.

""I can only conclude from Yahoo's actions that Yahoo both cares a great deal more than Google about its own customers and that Yahoo! has a lot more confidence in its prior click fraud detection efforts than does Google," Kaplan said.
Google spokesman Steve Langdon said the company continues to believe the Arkansas settlement is fair."

"Yahoo Settles 'Click Fraud' LawsuitWednesday June 28, 9:23 pm ET By Michael Liedtke, AP Business Writer
Yahoo Settles Class-Action Lawsuit Alleging Internet Powerhouse Profited From 'Click Fraud'
SAN FRANCISCO (AP) -- Yahoo Inc. will consider refunding money to thousands of advertisers dating back to January 2004 and pay $4.95 million in attorney fees to settle a class-action lawsuit alleging the Internet powerhouse has been profiting from bogus sales referrals generated through a sham known as "click fraud."
The agreement, given preliminary approval Wednesday by U.S. District Judge Christina Snyder in Los Angeles, doesn't limit Yahoo's liability -- one of several contrasts to a settlement reached in March by online search engine leader Google Inc. to resolve a class-action lawsuit over the same issue.
Google's financial commitment in its case, overseen by an Arkansas state court, is capped at $90 million. That's a sliver of the $13.3 billion in ad revenue that the Mountain View, Calif.-based company has collected since 2001.
As much as $30 million of the Google settlement could be paid to the attorneys who filed the case.
Although Yahoo doesn't know how much money it will end up refunding, company officials seem confident it will be a relatively small amount. Yahoo's ad revenue totaled $9.1 billion from January 2004 through March of this year.
"We want to keep our advertisers happy," said Yahoo lawyer Reggie Davis. "Whatever credits are owed will be 100 percent forthcoming."
In its settlement, Google is offering to give back less than 1 percent of the money spent on undetected click fraud and plans to make the payments in the form of credits that can used to buy more ads on its networks. Yahoo is giving advertisers the option of receiving cash refunds instead of credits.
All advertising claims submitted to Yahoo will be subject to the review of a retired federal judge who will oversee the refund process. Google's review of click-fraud claims won't be subject to any oversight.
The settlement also will give Yahoo an opportunity to provide more clarity about one of the most confusing -- and potentially disruptive -- issues hanging over the rapidly growing Internet advertising market.
As part of the agreement, Yahoo has committed to working with others in the industry to define what constitutes click fraud.
The ruse takes different shapes, but the end result is usually the same: Merchants are billed for fruitless traffic generated by scam artists and mischief makers who repeatedly click on an advertiser's Web link with no intention of buying anything.
Those clicks generate revenue for Yahoo, the owner of the Internet's second-largest advertising network behind online search engine leader Google, as well other Web sites.
The estimates on the prevalence on click fraud vary widely, partly because there are so many different interpretations of the practice.
A recently established index compiling information from more than 1,000 advertisers has estimated that about 12 percent of the clicks on ads running in the Google and Yahoo networks are fraudulent. Other studies have estimated the click fraud rate as high as 30 percent -- numbers that both Google and Yahoo have vehemently disputed.
Yahoo already has given advertisers billions of free clicks because it would rather err on the side of its customers when anything questionable occurs on its network, said John Slade, senior director of product development.
Darren Kaplan, an Atlanta attorney representing advertisers in the class action, praised Yahoo's approach.
"I can only conclude from Yahoo's actions that Yahoo both cares a great deal more than Google about its own customers and that Yahoo! has a lot more confidence in its prior click fraud detection efforts than does Google," Kaplan said.
Google spokesman Steve Langdon said the company continues to believe the Arkansas settlement is fair.
Kaplan and a group of other lawyers had filed a click fraud suit against Google in San Francisco federal court. That complaint was derailed when Google settled the Arkansas class action. Kaplan and Los Angeles attorney Brian Kabateck hope to prevent the Arkansas settlement from getting final approval in a two-day hearing beginning July 24. "

Tuesday, June 27, 2006

Google will become a history: cash back instead of click fraud

"At, we want to change your relationship with advertising; making it something that always works directly for your benefit instead of wasting money interrupting and annoying you.
Why Current Advertising Stinks
To most people advertising is a dirty word. Look at the traditional world. We have been bombarded and interrupted by unwanted advertisements from the time we could walk and most of us have developed a healthy animosity towards ads. In fact, we hate them so much we actually spend money to avoid them; buying things like Tivo DVR’s and Satellite Radio. Yet, advertisements fly around our heads like pesky insects on everything from city buses to products placed in our favorite movies. Occasionally, we find one entertaining or relevant, but mostly we simply endure them as a necessary evil.
When you ask most people to describe advertising you will likely hear things like “annoying,” “interruptive,” “biased,” and “wasteful.” Does it have to be this way? We don’t think so.
The State of Online Advertising
The next question becomes, “has the Internet made advertising better for consumers?” It has certainly made advertising more of a scientific certainty for advertisers. Instead of placing an ad in a magazine or on television and hoping that people actually pay attention to the message, online advertising allows companies to pay only when you actually view a page with an online ad it, or click on a link to an advertiser’s web site. For the first time in history, it is now possible to accurately measure and track how people are actually interacting with each individual advertising unit on a global scale and in almost real time. Huge amounts of money are now pouring online because advertising can deliver laser beam certainty.
But has this amazing shift also changed how people feel about advertising? Not really, in our opinion. We avoid banners, and hate things like pop-ups and interstitials that continue to interrupt us. We have to sit through a full page ad on our screen before we can enjoy the New York Times, CBS Sportsline, or a host of other sites. And we try to avoid these ads as much as we can. Online advertising is still a necessary evil.
This is true even of the paid search advertising at search engines such as Google, Yahoo! and MSN. These sponsored links are certainly more targeted and can be helpful, but most people we know still try to avoid these ads. They are happy that the sponsored results are pushed off to the margins of the screen and conspicuously labeled “Sponsored” to keep them away from pure organic search results. Why is this? We think it is because the existing “Pay Per Click” search advertising model—in which advertisers pay each time someone clicks on a search link—fails to align incentives properly between the consumer, the advertiser and the search engine intermediary connecting them. This existing model is mostly there to benefit the search engine.
Search Engines Auction you off to the Highest Bidder
Most people don’t know this, but there is a huge advertising auction that takes place every day at the major search engines. And what are they auctioning? The auction is for your attention. Companies bid for your attention by paying to be listed in the sponsored search results when you type in certain terms. And the more they agree to pay the search engine for each click, the better chance they have of getting listed higher up in the search rankings. Every engine is a bit different, but the paid results are organized with one primary goal in mind; to maximize the amount of advertising revenue the search engines make. Thus, the more an advertiser pays the search engine for your click, the more likely that advertiser will be listed high in the rankings and get your attention. That is why the advertising is called Pay Per Click (PPC).
This auction system works really well for the search engines because is allows market forces to drive up what an advertiser is willing to pay for your attention. And these rates go up all of the time. If I sell coffee makers, I want you to see my ad first when you search on the term “coffee maker,” and I don’t want my competitor to get to you first, so I’m willing to bid higher and higher click rates to be listed high up in the rankings for that search. And the more the search engine knows about you (where you live, what sites you visit, etc.), the more targeted you are as a sales lead and the more they can charge advertisers in this auction system to reach you. But here is where the mistrust of advertising comes in; the sites that are listed first in the sponsored results for my search aren’t necessarily offering the best coffee maker for you; they are the sites that make the search engine the most money. And the consumer has no idea what the advertising amount is. It reminds us of a commissioned sales person that shows you a product at a store that gives them the best commission. Do you trust them? Probably not. Isn’t this why the search engines have to label these results as advertisements?
A Major Shift in Online Search Advertising: From Pay Per Click to Value Per Action
The Pay Per Click auction has been great for search engines, but the problem is that most of the value created by this auction is flowing to the search engine in the form of advertising fees that primarily benefit the engine at the expense of buyers and sellers. Don’t get us wrong; we aren’t saying you shouldn’t use search engines (we think they are fantastic tools for finding information). Our mission is to show you that when you are buying stuff online, there is a way that we can bring you directly into the value created by this advertising auction for your attention.
At Jellyfish, we want to pioneer a new form of search advertising we call Value Per Action. Instead of charging fees when you click, we charge our advertisers only when you actually buy, and we share at least half of this fee back to you as cash back. In other words, we connect you directly to the value of the advertising. Instead of measuring how much money WE make when you click, we measure how much value the advertiser is willing to pay YOU for your sale. With VPA, the advertising value of your attention becomes transparent (you can see it in the form of cash back) and changes from annoying advertising into something that actually lowers your end price.
And to help you get the maximum amount of savings when you buy, we are using the same kind of advertising auction that the major search engines do. But instead of ranking our results by the amount companies pay us in the form of hidden advertising fees, we rank results by the end price for a product, after our cash back. We think this will create a perfect retail marketplace because retailers will increase their VPA advertising rates to get to the top of our rankings and the value of that advertising competition will flow directly to you to lower your price (you can see a picture of this system here). The more stores compete for your attention, the more you save. And you don’t have to do anything more than search for things you want to buy.
Consumers Take Control of Advertising
We think Value Per Action is a big idea. It is a way that advertising can adapt and survive in a new world where consumers have ultimate control to tune out interruptive, biased advertising. We think you will see many companies that begin to use forms of VPA to make advertising something that you control, receive independent value from, trust, and most importantly, invite into your lives. Our hope is that will lead this charge, and help people turn the tables on traditional advertising. Do you want to help us? Then please start shopping at Our service is free and who can’t use more money in their account?"

Friday, June 09, 2006

CNBC Click Fraud report

"We will keep them honest" Bill Gates.

They are playing with the wrong guy: PR on CNBC/MSN is going to make the full picture of Click fraud known to the market.

Google could be in very big trouble like Vonage now: THEY DID NOT DISCLOSE MATERIAL FACT ABOUT REAL SIZE OF CLICK FRAUD PROBLEM. Once it will be exposed lawsuits will follow.