For the last several months Google has been involved in a lawsuit regarding fraudulent Clicks in their PPC program. This month Google offered a potential settlement, however it may not be the end of the story.

Recently Google announced that they were planning to settle a "click fraud" class action lawsuit for $90 million. $60 million of this would be to compensate the victims, while the remaining $30 million would be set aside to pay legal fees. Some feel that this may not be adequate compensation as Google has earned $13.3 billion in ad revenue since 2001 and currently has close to $10 billion in cash.

Google's offer of $60 million equals out to about $4.50 per $1000 spent on advertising through its net work in the past 4 plus years. The associate press points to numbers between $100 and $400 per $1000 spent, or as much as 40%. If true, Google may need to compensate their advertising members between 1 and 5 Billion dollars in over billings from the last few years rather than $60 million.

These settlements will very likely test the faith in Google's advertising program. Advertisers have until late June to agree to the settlement or reject it and seek a different offer.

The crux of the matter then and now, is that a search advertiser must agree and sign contracts requiring them to pay for all valid clicks, while the engine has the responsibility in determining what is or is not a valid click. This leaves the onus on an advertiser to prove that a click was invalid although they do not have access to all of the records or tools that Google uses to track clicks. However, even with this protection Google understands the need to protect its brand name and image. Shuman Ghosemajumder Google's Product Manager for Trust and Safety, indicated that the company is reviewing ways to make its AdWords program better with out revealing the crucial information that might help the swindlers avoid detection.

In the end, these numbers have been deemed too low for a final settlement by some. Lawyers representing several of Google's AdWords advertisers have filed suit hoping to block the proposed $90 million settlement. The lawyers claim that the settlement does not adequately compensate those affected. It will be interesting to see how this plays out over the next few months.

At the time of this writing, Yahoo's advertising network is faces a similar click fraud lawsuit. To learn about click fraud and its effects on the marketing on the search engines review this article from Wired.

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