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May 11, 2006
Google refund offer an `insult'
By Michael Liedtke
Associated Press
Published May 8, 2006
John Thys still hasn't figured out how much his company has paid Google Inc. for bogus sales referrals caused by "click fraud"--a sham aimed at a perceived weakness in the Internet search leader's lucrative advertising network.
But Thys says he has uncovered enough of it to conclude that Google is trying to shortchange his company and thousands of other advertisers by offering refunds totaling $60 million to settle a lawsuit.
"It's almost like an insult that they expect us to take this token money," said Thys, director of Internet marketing for Radiators.com.
Google also expects to pay $30 million to the lawyers who settled the case on behalf of advertisers, raising the settlement's total value to as high as $90 million. Still, that's a fraction of the more than $10 billion in cash held by the Mountain View, Calif.-based search company.
An Arkansas judge is expected to consider the proposed class-action settlement in late July.
The refunds, which will be provided in the form of advertising credits, are meant to compensate Google's customers for undetected click fraud, which contributed to the $13.3 billion in ad revenue that has poured into the company since 2001.
Google's offer works out to a $4.50 refund on every $1,000 spent in its vast advertising network over the past 4 1/4 years.
Meanwhile, independent studies assert that anywhere from $100 to $400 of every $1,000 stems from click fraud. If those estimates prove correct, Google might be on the hook for $1 billion to $5 billion in advertising refunds.
Posted by dj at May 11, 2006 02:47 PM