San Francisco – June 30, 2005 – Reuters is reporting today that Fort Collins,
CO based Click Defense, Inc. is suing search giant Google Inc. The charges stem
from ”click fraud” – a claim that Google has failed to protect users of its
AdSense and AdWords programs from deliberate clicks on search ads by users with
no plans to do business with the advertiser – and whose only motivation is personal
financial gain at the expense of the advertiser.
According to Click Defense, the fraudulent activity at Google has cost the
company at least $5 million.
According to the Click Defense web site, click fraud (or Click Spamming) is
a growing problem which can involve competitors clicking repetitively on ads,
hiring others to do so, or using automated programs (robots) for this purpose,
in order to drive up marketing costs and keep companies from effectively using
The company also claims that sophisticated spammers can circumvent conventional
fraud detection methods in place at the major search engines today. These fraudulent
clicks are at the heart of the action taken by Click Defense.
Click Defense is seeking class action status for the suit which was filed on
Reuters has quoted a Google spokes person as saying, “We believe the suit
is without merit and we will defend ourselves against it vigorously”.
Google’s stock price has soared in the past few months from $85 to over $300
– almost exclusively on the basis of the revenues brought in by its advertising
As an example of what a single click can cost an advertiser, the Web
Hosting Pay Per Click Index shows that recent web hosting clicks were averaging
from $4.00 to over $6.00 each.