Web Hosting Provider AIT Seeks Class-Action against Google

December 9, 2005
December 9, 2005 - (HOSTSEARCH.COM) - Web hosting provider AIT (http://ait.com) has announced that it is involved in leading a potential class-action against world famous search engine provider Google. According to a Press Release circulated by the company, AIT has ‘moved the United States District Court for the Northern District of California to substitute in as the representative plaintiff in a lawsuit against Google, Inc. that accuses the search engine giant of breach of contract and unfair business practices.’

AIT has for a number of years advertised on Google - a company famed for its search driven advertising options. These options involve advertisers paying for a variety of key words. When users generate Google searches utilizing these words, links appear in search results. These links direct the user to an advertiser’s website. The scheme only involves payment when a user clicks on a link and is redirected to an advertiser’s website. However simple the scheme, it is open to abuse that has been termed ‘Click Fraud’.

Click Fraud happens when someone clicks Google links knowingly and with no intention of doing business with an advertiser. Two key types of click fraud exist. The first is where an advertiser’s competitor continually clicks on an advert to drive up a competitor’s advertising costs and ensure their budget is spent. The other type of click fraud is through Google’s affiliate sites. Any advertisement that appears on a Google website creates revenue directly for Google. However, if an advertisement runs on a Google affiliated site, then revenue is shared with this site. Some affiliates are known to click on advertisements in a bid to drive up their own commissions. One possible route around both types of fraud would be for Google to log where clicks were made and indicate this on some form of billing. Google does not currently follow this procedure.

AIT claims that although Google is aware of click fraud, it has taken few steps to address it. AIT’s lawsuit (which they would like to reach class action status) questions Google's efforts to deter click fraud.

"Google is able to block spamming efforts from its own Google Gmail service and should do the same to protect its pay-per-click advertising clients. However, Google chooses to do nothing because substantive action would both invalidate the current paid search model and because a lot of people are making a lot of money from this," said Clarence Briggs, AIT's Chief Executive Officer. AIT says it has lost hundreds of thousands of dollars to fraudulent clicks even though Google has the capability to detect fraud. "We have been watching this and documenting it for some time, not only for ourselves but for our customers from our network and several other networks," said Briggs, "and we have the technical expertise to prove without a doubt that it is happening and that Google could do something about it if they wanted to.

"This is a business model that pays lip service to concern about fraud but, in fact, stands to lose money if the fraud is vigorously pursued," said Briggs. Google's technology tracks clicks for the purpose of charging fees; that same technology could be used as a fraud screen. "You get a phone bill with the numbers for which you were charged," said Briggs, "but Google does not and will not provide you with records showing you the clicks for which you were charged or where they originated." Google has demonstrated some ability to track clicks based on having made restitution to some companies for fraudulent clicks, yet restitution appears to be exceedingly rare and Google refused to make restitution to AIT even after AIT provided Google with well-documented evidence of click fraud. With the Ad Sense program, particularly, Google should be able to detect fraud since it controls the entire network, from taking in money to paying out commissions. "Many of the fraudulent clicks come from overseas proxy servers; these RBL servers are widely known as origins of fraud and spam and Google should block them like any other responsible ISP does," said Briggs.

AIT claims that addressing click fraud would have major implications for Google’s advertising revenue model. It also suggests that Google maintains a ‘conflict of interest’ when it alone provides policing against click fraud. AIT suggests that an advertising campaign focusing on North America which received numerous hits from around the world brought click fraud into their focus.

"Our campaign was for North America only; so, how can someone tell me that clicks from Russia, China, and Vietnam are legitimate?" asked Briggs. "When multiple clicks from the same IP block hit our site in rapid succession but none of those visitors stay, how is that legitimate? And, how serious can you expect Google to be about policing fraud since PPC advertising accounts for nearly all of the company's revenue?"

"The real threat here is to the concept of paid search and ultimately to the entire Internet," said Briggs. "If people lose confidence in the commercial viability of the Internet it threatens the very idea of an emerging global, digital economy. Sooner or later, if something isn't done, the second Internet bubble will burst."

HostSearch will follow this action and report on events as they occur.

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