Legal Research

Microsoft Plays Whac-A-Fraudster

Yesterday Microsoft filed suit in U.S. District Court in Seattle against 3 members of a Vancouver BC family, accusing them of “perpetrating a massive ‘click fraud’ scheme on the online advertising network operated by Microsoft”. The defendants are brothers Eric and Gordon Lam and their mother, Melanie Suen. According to the NY Times:

“Microsoft’s theory is that Mr. Lam was running or working for low-ranking sites that took potential client information for auto insurers. The complaint said that he directed traffic to competitors’ Web sites so they would pay for those clicks and exhaust their advertising budgets quickly, which let the lower-ranking sites that he sponsored move up in the paid-search results. When people clicked through to his site, it asked them to supply contact information, which he then resold to auto insurance companies, according to Microsoft’s complaint, which estimated his profit at $250,000. In the complaint, it also said it had to credit back $1.5 million to advertisers because of the Lams’ alleged fake clicks. Microsoft is seeking $750,000 in damages from the defendants.”

It’d be nice if Microsoft could win this one. But it’s ultimately a game of Whac-A-Mole — another click fraudster will always pop up. ClickForensics estimates the rate at 13.8% for the first quarter of 2009 (down from the record of 17.1% set in 4Q 2008), but Danny Sullivan of Search Engine Land says the rate is actually much lower. No matter — click fraud is always a good story for the mainstream press.

Full post as published by Jenkins Webblits on June 16, 2009 (boomark / email).