Tor's weblog

The following story is rather scary - it goes to the very heart of how to make money on the Web, something I am very interested in. I do now see why so many sites find alternative models to the pay-per-click model.

I was told about this bot-net being unravelled early last week, but I had no idea it was this big.

Click Fraud Snowballs:


From Help Net Security comes the astonishing revelation that a botnet comprising more than 34,000 infected computers has been perputrating click fraud against pay-per-click systems like Google AdWords. Let’s do some math:

10 clicks/day X $1/click X 34,000 computers X 365 days = $124M annual fraud

100 clicks/day X $1/click X 34,000 computers X 365 days = $1.2B annual fraud

100 clicks/day X $5/click X 34,000 computers X 365 days = $6.2B annual fraud

For the first 3 months of 2006, Google reported $928 million in “network” ad revenue, on track for $4 billion in 2006. What if 5% of that is fraudulent? What if it’s 10% or 25% or 40%?

Google has made an astonishing amount of money on pay-per-click advertising. For Google investors and insiders, it’s almost too good to be true.

What if it is?

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