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Tuesday, October 31, 2006

Click Fraud Blues

Stocks: (GOOG)(YHOO)(F)

Whenever someone says that want an audit, good things rarely lie ahead. Several of the nation’s largest advertisers want the large internet sites to give a better accounting of their audiences and validity of users clicking on text ads. And, why not? Click fraud has been an issue on the internet for some time.


But, now companies like Kimberly-Clark and Ford want an army of auditors looking over the shoulders of the Googles and Yahoo!s of the world. If there is a finger on the scales, they want to know about it.

Of course, for old media, this is nothing new. Television audiences have been measures for decades. The Audit Bureau of Circulations has checked newspapers and magazines, and has sometimes found that publishers are cheating.

If big newspapers can do it, why can’t large websites?

For a company like Google, where virtually all of the news is good, it is hard to imagine that something might come out of left field to undermine the revenue growth of the company’s hugely successful AdSense platform.

But, bad news does have a habit of catching up with good.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
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