Well there are of course bumps in the way of online advertising towards its bright future.
And Google has reasons to be nervous. Paid-search advertising generates about 98 percent of its revenues. Red-hot demand for cost-per-click advertising doubled Google revenues in the first three quarters of this year and paved the way for the company’s blockbuster IPO in August.
Google CFO sounded the alarm today, on click fraud issue, calling it the “biggest threat” to the Internet economy.
“I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model”
The paid-search model is now the fastest-growing form of Internet advertising, according to the Interactive Advertising Bureau. But analysts, fraud experts and now Google are openly fretting about the rise of click fraud.
The main perpetrators appear to be competitors of advertisers and also scam sites set up for the sole purpose of hosting ad links provided by Google, through its AdSense unit, or Yahoo!, through its Overture service. Humans or specially designed software then click on those ad links in order to “steal” revenue from advertisers.
Government watchdogs, primarily focused on pursuing Internet scams that harm consumers, have only recently taken action.