Internet, posted: 2-Jun-2006 20:57
The class action against Google for failing to prevent click-fraud is churning on with a settlement being proposed for anyone who has bought advertising from the search engine giant between January 1 2002 and the present.
In what's being termed as a "Seattlement", Google says it will provide advertising credits to members of the class action, on a pro-rata basis.
Google says it will establish a $90 million settlement fund to resolve itself from the claims. But, there are several gotchas in the proposal. First, these are credits, not refunds, that apply to advertising purchases.
Second, the credits can only be applied to half of the cost of advertising purchases. If you buy $100 worth of advertising, only $50 can be paid for through the credits.
Third, the pro-rata basis means you'll get credits in proportion to how much your ad spend was as part of Google's total advertising revenue since January 1 2002. Think about that for a second: Google's ad revenues in 2006 are said to be around $8 billion.
Is the "Seattlement" beginning to stink yet? It gets worse though: of the $90 million to be set aside for the fund, a third or $30 million will go to the lawyers. Something tells me the lawyers won't take Google advertising credits as per above instead of hard, bankable cash.
The details on Google's settlement proposal are on the Click Settlement website. If you are part of the class action, go there and read up on your options.
Google flagged click-fraud as the biggest threat to its business model in 2004 already. Often, it's competitors of the advertisers who commit the click-fraud to cause damage, and it's not clear if there is a ready solution to the problem.
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