Bill Gates still is not out of the picture with the world's largest software company that he co-founded, Microsoft, Inc. (NASDAQ: MSFT). In fact, Gates' name is all over a new patent by the company that deals with how to track online web browsers who click on ads and tie them to later, verified online purchases. This is not exactly a new concept in the world of e-commerce, but the striking involvement of Gates in many of Microsoft's recent patent applications is. Was Gates really this involved in a day-to-day basis? Remember, his title was "Chief Software Architect" -- which tells me that conceptual designs involving software was in his daily grasp of responsibilities.

One of the software giant's most recent patent applications deals with an online advertising system that uses 'points' to track the correlation between clicking on ads while web browsing with actual purchases. Now, many Google, Inc. (NASDAQ: GOOG) AdWords customers (and Yahoo!, Inc. (NASDAQ: YHOO) ad customers) already do this. When you click on that Google ad, a cookie places itself on your PC and if you complete a transaction based on that click, Google knows it. This is known as "conversion rate" in the marketing world. It's interesting to see Microsoft's spin on this tracking concept with one of the software company's most recent patent applications.

But Microsoft's goal here is to curb and hopefully prevent click fraud, which continues to dog almost every online advertiser since it may (or may not) be easy to fraudulently manipulate. So, from all viewpoints, Gates having his name attached to this recent patent application says he had a hand in the concept, but to what extent is unknown. The concept, which was developed in May of last year, was actually before Gates turned the reigns over to Ray Ozzie, his hand-picked replacement. Does Gates' involvement here signify that internet advertising is a core area within Microsoft's business strategy? Yes, and the company has not been shy about saying that either in the past 18 months as Google's meteoric rise has happened. I'm not sure this patent will be Gate's curtain call, but Ole' Softie needs an advertising hat trick now more than ever.

Google, Inc. (NASDAQ: GOOG) has been listening to its AdWords customers complain about click fraud for years now. Although the Internet search leader has downplayed those concerns in large part, it has had to recently acknowledge that click fraud does exist. Google does say that it has sophisticated, automated tools in place to prevent more than 99% of click fraud, which explains why it has not publicly been concerned. Some of Google's advertising customers, though, believe click fraud severely dampens their business, and the subject of 'click fraud' continues to come up quarter after quarter.

Maybe Google finally wants to quash those voices in part, as it has officially announced a web-based resource center for its advertising partners and customers that gives them access to Google's information about click fraud and what the company does to combat it. I'm pretty sure most of the information is sanitized to a point, or fraudsters would use such a resource to make their ill-gotten gains easier to manage.

Google's new "Ad Traffic Quality Resource Center" should at least give those who closely monitor click fraud methodologies all over the web some kind of solace on what Google is constantly doing to ensure that kind of activity is kept to a minimum on its network. Even so, is this just a pacifier? Can Google trumpet exact detail on the actual level of click fraud and the detailed methods it uses to counter this? Not exactly, much to the chagrin of its ad partners. But, in place of that, Google plans all kinds of information on the new resource center website that will give ad partners and customers reports with the amount of money Google didn't bill the advertiser by detecting and discarding invalid clicks. Originally announced for release in March, it is finally here. And just in time, as Google's largest (90%+) source of revenue is -- you guessed it -- from click-based text ads on its search pages and partner search pages.

In the midst of writing last week's "click fraud" post, I was suddenly struck by something. Is Google Inc. (NASDAQ: GOOG) forcing a "reboot" of the advertising industry as we know it? Although this article postulates that Google's new universal search unveiling (really just a rework) was a causal event for the rather large 10%-15% click fraud estimates that came out of Fair Isaac, what is one to make of all this?

Google has stated before that it measures click fraud activity stringently and zaps almost all of it out of existence -- sometimes before the Google ad partner is even billed. While some Google partners are not 100% convinced of this, they continue to trust the web search leader since so many businesses live or die based on Google advertising revenue. You can be mad at the company's efforts to keep click fraud under control, but you can also be quite powerless.

The company can't just give all the specifics on how it fights click fraud, lest it enable click fraud hucksters even further. But, Google will continue to face public pressure over click fraud well into 2008 unless is devises some kind of strategy (a public one) to assure customers that it it keeping a lid on the problem. Google has some of the best engineering minds on the planet -- so if any company can get this under control, keep it that way and prove to its customers that it's not a concern, it will be Google. Time to put up or shut up.

On the one year anniversary of BloggingStock.com's launch, I took a look back at our inaugural posts-

Sarah Gilbert was writing about the phenom YouTube, and AOL's (Time Warner, NYSE:TWX) investment in a rival Veoh.

Anne Metz wrote about the success of Skype and Vonage in the VOIP business. Skype (eBay, NASDAQ:EBAY) had just hit 100 million customers. If you still want some Vonage stock, you can get it real cheap.

Brian White reported on the growing dissatisfaction of WalMart (NYSE:WMT) suppliers with the company's requirement that they maintain inventories of product at the beck and call of the retail giant.

Howard Tsung related Steve Jobs' assurance to Apple (NASDAQ:AAPL) stockholders that, regardless the purchase of Pixar by Disney, his role in Apple would remain unchanged.

Sarah also wrote about the one-day 11% drop ($31 billion) in Microsoft (NYSE:MSFT) stock and how some readers were livid at the press, blaming the messenger for the message. By the same thinking, perhaps Sarah should be credited for Microsoft's subsequent growth.

Brian filed a story about a new Sam's Club product; for $30 grand, one could buy a junket with Jimmy Buffet of "Cheeseburger in Paradise" fame.

Anne Metz covered AOL's hopes that product placement with a new TNT series, Saved, as well as their hit The Closer, would help push the pay service to new heights. How'd that work out?

Brian launched our obsession with Google (NASDAQ:GOOG) with two stories, about implications for the company of widespread click fraud, and its interest in ad-supported municipal wireless.

Looking back, I'm struck by how quickly the market changes, especially the e-economy, and how on top of trends our BloggingStocks writers have been. Pretty good work for a one-year-old, eh?
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Although it is hard to see why it matters, Yahoo! Inc. (NASDAQ:YHOO) has made a great display of appointing one of its attorneys as head of an initiative to fight click fraud. He will be vice president of marketplace quality. Since both Yahoo! and Google Inc. (NASDAQ:GOOG) are doing everything in their power to combat the problem, it is difficult to see how the move improves upon that.

Yahoo! claims that 12-15% of clicks on its ads are "invalid or of inferior quality." Google puts its number at 10%. Yahoo! and Google have had to fight suits from advertisers that believe "click fraud" inflates advertising rates.

Yahoo! and Google both have programs to detect click fraud, and since neither of them announce specifics on how successful these are, its is hard to know whether they are addressing the problem. There are, however, other solutions. One may be the new Google "pay-per-action" advertising program. Advertisers in this program only pay if a user files out a form or makes a purchase. The system is more cumbersome than simple pay-per-click, but it is probably harder to game.

The other solution is to allow an independent outside agency to measure click fraud at all major websites. This is the path that most advertiser want because it allows for outside validation of the systems used by companies like Yahoo! and Google. It would be the best way to address the issue, but the internet companies have resisted it. No one likes to be policed.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Click fraud is a term that continues to haunt online search leader Google Inc.(NASDAQ:GOOG), although the company constantly downplays the problem as almost a non-issue based on the search volume it handles every day. That may be true, but when suspicious activity arrives, that is little comfort to the Google advertising customers who see their ad budgets dwindle based on possible click fraud activity.

Starting this month, Google plans to institute a program that will give its advertisers the ability to prevent their ads (known as "pay-per-click") from being shown to competitors who have been suspected of repeatedly clicking on the ads. Repeated clicks fraudulently increase the cost to the advertiser.

The new Google program will allow advertisers to specify which IP addresses will be blocked from receiving ads from specific text ads. Now, I am not sure how this will affect the higher end of the click fraud market (who route clicks using thousands of IP address most likely), but for much of the click-fraud perpetrators, this may curb a decent amount of activity.

As part of the reaction to an article on click fraud published in Business Week, 2 October 2006, many online advertisers including VISA, Carat Fusion and Agency.com, have created the Click Quality Council to set standards for Pay Per Click advertising for the 2,500 member companies of the Click Fraud Network.

The Click Quality Council will be led by Click Forensics LLC located in San Antonio, Texas. In order to get a handle on the extent of the click fraud problem, members of the Click Quality Council will draft a comprehensive set of definitions of click fraud, and will work with advertisers to develop click measurement guidelines that take into account advertisers' perspectives.

The Click Quality Council will work with the Interactive Advertising Bureau (IAB) which is currently drafting its own set of Click Measurement Guidelines in order to clearly identify invalid and/or fraudulent clicks. LookSmart, Microsoft and Yahoo will participate in efforts by the IAB to combat click fraud. The IAB has been a leader in online advertising measurement for years. It published widely used Global Ad Impression Guidelines in 2004 when click fraud began to become a noticeable problem for online advertisers.

Google Inc. (Nasdaq: GOOG) shares closed the trading day at $406.87, an increase of $2.89 or 0.72% over Monday's close. Just over 5 million shares traded hands today.

Google continues to make news -- of course -- by looking for growth-market acquisitions. India is an obvious choice here, so it was no surprise to see Google looking for strategic purchases that fit its corporate culture as well as looking for talent.

Although Google's seemingly-impenetrable global network may have had technical difficulties today, another issue that is surfacing like clockwork every other week is click fraud. As I've written on several times, Google will continue to face the market-perceived wrath of click fraud, which has even made the recent cover of BusinessWeek as Victoria Erhart reports here.

Although Google continues to maintain that click fraud is heavily monitored and is under control, the market's perception (and the public perception) is that click fraud continues to be a large problem for companies like Google and Yahoo! It's hard for Google to nail down specific solutions that appease the masses without giving away pieces of its anti-fraud strategy. But it will have to devise some kind of strategy or those who fear online click fraud are sure to continue making noise.

Pressure is mounting on Google Inc. (NASDAQ:GOOG) and Yahoo! Inc. (NASDAQ:YHOO) to do more to fight click fraud.

A group of advertisers including well-known Web-brands IAC/InterActiveCorp's (NASDAQ:IACI), LendingTree and travel site Expedia, Inc. (NASDAQ:EXPE) are going public with their concerns later this month, according to BusinessWeek. Plus, a cybercrime unit lead by the FBI, the U.S. Postal Inspection Service and the staff of the U.S. Senate Judiciary Committee are also looking into this issue, the magazine says.

Click fraud is a big deal for search engines who sell their advertising based on the number of clicks an ad receives. Sometimes companies click on competitors' ads to fraudulently drive up their costs. Web site owners also improperly click on ads to get more revenue.

Google and Yahoo! have both repeatedly said that the extent of click fraud is being hyped by consultants and research firms looking to make a quick buck. They both claim to intercept most fraudulent clicks before they reach their customers. Even so, both refuse to provide much detail about the extent of the problem. Until they do, the worries about click fraud from advertisers and shareholders won't go away.

Google has finally responded to industry pundits who say click fraud is out of control. In an area I've covered many times before, my opinion here is that Google's communication to its all-important advertising customers was virtually nil regarding click fraud. It's a bad move, obviously, for Google to go into the specifics of how it monitors and catches click fraud (which would encourage more of it), but it has to figure out a way to calm the masses who may fear that they are losing millions of dollars to fraudulent clicks.

Well, Google has said now that click fraud is an largely-exaggerated problem that continues to get press and continues to fan the flames of a problem that Google says is way overblown. I guess we'll have to put 100% belief and faith in Google for that statement since it obviously cannot be proven. I'm not saying this is a bad thing, but I'm wary of trusting, without proof, 100% of anything any company says. If you have that level of trust I hope you escaped the Enron scandal intact. Now, I'm not saying Google is not trustworthy -- far from it. I'm saying that turning over 100% trust *can* be a mistake. I, myself, require proof beyond the shadow of a doubt if my investing dollars are involved. Unfortunately, that is incredibly hard to find.

Which brings me back to Google. After reviewing Google's lengthy and in-depth report that battles the the actual definitions of what click fraud really is, and what some people and companies say it is, I am leaning more and more on Google's side. All it took was the Google folks to respond in a detailed and logical way, which it has, and the flames can settle down now as customers start understanding how a real definition of click fraud is calculated. Major kudos to Google here on announcing and publicizing the click fraud tracking methodology it has. As I've said before, communication is the key. Keeping quiet with pleasantries is not the best course of action.

Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.

Just this week, Google announced a new Google AdWords feature that will show advertisers if suspected click fraud has affected their accounts. Soon after, a judge in Arkansas has approved a $90 million settlement against the search giant. The case was brought by Google advertisers who felt they had been cheated by having to pay Google for illegitimate clicks.

70 objections, however, were brought up by the smaller Google advertisers included in the settlement, as they believe the remuneration Google will pay them -- $4.50 for every $1,000 spent on the Google network for several past years -- was just not enough. A handful of plaintiffs on Monday stood before Griffin to express their dissatisfaction with the settlement, and they charged Google with failing to exercise "reasonable" care to stop click fraud and with misrepresenting its efforts to crack down on the problem.

When Google's core customers -- you know, the ones responsible for Google's revenue/business model existence -- come looking for click fraud answers, the search giant needs to speak up. Until this week, I've chided Google many, many times on the poor communication it has for the click fraud issue, one that is just as old as Google itself but one that has become a perceived large problem for Google.

Nobody really knows if click fraud is a huge or small problem (but it exists), and Google's lackluster communications have played a part in the perception. Google is a great company with an excellent (although single-minded) revenue stream -- and it needs to communicate with the companies that help it produce that revenue stream.

I'm very pleased to see that Google is installing a new feature alongside the AdWords console that hundreds of thousands of advertisers use to display relevant textual advertising next to Google search queries. What is that feature? It's "the truth", as it were. Google will be listing possibly fraudulent clicks next to all keywords in the AdWords console for each advertiser in an attempt to settle fears that click fraud is growing rampantly without being adequately policed by the search giant.

This is great news and it's about time Google did something like this. With all the programming talent it has, it's surely been able to keep up with the propensity for massive click fraud and abuse for quite some time, but it's done a horrible job of communicating those efforts and marketing to the world that click fraud is under control. Sure, you have to trust that Google is doing all it can to police and catch click fraudsters, but this is still a lot more than what it was doing before -- next to nothing in terms of public action.

Will this new feature allay fears from the hundreds of thousands of Google AdWords advertisers who have been fearing that fraudulent clicks have been chipping away at their advertising budgets? More than likely, yes. It lets Google advertising partners know that Google is keeping tabs on the problem. With Google advertisers providing almost all of Google's revenue right now, that is the customer segment Google needs to be concentrating on in a huge way. This is a great first step here.

Fellow blogger Michael Rogers and I have covered Google's click fraud issues several times. It's a huge, looming, problem that Google seems to gloss over regularly but that I believe its advertisers and partners will see as a serious drawback if it is not kept in check. Like anything criminal on the web, it is almost impossible to stop. But that does not mean click fraud can't be dealt with better than it is now. Google has some of the smartest computer engineering talent in the world, doesn't it?

This independently commissioned study, started with a Google advertiser (Lane's Gifts) and Google itself, suggests that Google takes reasonable steps to ensure click fraud is kept under control, although there is no mention of the specifics. Google's response to the commissioned report is that it backs it but doesn't agree with everything in it.

The fact the search leader does not publicly address, in full form, how it addresses click fraud is perplexing to me. Google could soothe legions of advertisers by just keeping the public up on its efforts to respond to click fraud. But all we get is generalities. This is not what advertisers or GOOG investors want to hear.

Google is making great products that people use all over the world. But it fails in some areas to put on the PR face for issues that will only consistently target the company. It also needs to beef up its marketing somehow to get new customers using all its latest and greatest products.

Viral marketing is not going to be enough, as time has already shown, to get customers using Gmail and Google Finance. Perhaps Google has a longer multi-year plan?

Google shares climbed down the ladder today to close at $403.05, more than a whisper away from Monday's close, as GOOG shares were down $4.84 or 1.19% from Monday. With a little more than 7.4 million shares trading hands, the Googleverse was alive today, at least here at BloggingStocks.com, with my talk of click fraud continuing to be a nasty thorn in Google's side -- one that does not get the media attention it deserves, as Google shares just keep bumping the stratosphere.

Several reader comments disagreed with my position, and that's fine. I still hold the opinion -- strongly -- that click fraud, while old news to some, is a huge threat to Google's continued dominance. Hackers and fraudsters are just as crafty as Google's might engineers, I say. I've seen this all before, of course -- Spam is not just a can of processed meat.

With competitor Yahoo!'s sales rising 26% but just barely disappointing market estimates on its $1.58 billion quarterly sales figure that was just announced today after market close, it earned just over $164 million in net profit for its second quarter. Will Google do the same and barely miss or meet sales and income estimates on its next quarter? If history is any guide, it will blow right past them.

Although many of us here at BloggingStocks.com have written before on the threat click fraud is having -- and will continue to have -- on Google and others like Yahoo! and Microsoft, is Google doing anything about it? It's paid lip service so far regarding the advertiser and investor community, vaguely stating that it has systems and artificially-intelligent computer programs in place to weed out click fraud.

But, non of this talk has quenched fears that click fraud -- which can be hard to measure -- is actually becoming worse. My belief is that click fraud is most likely one of the largest threats to Google at this time. To hell with the competitors -- Google's own short-sightedness here could be a major problem. The more popular an Internet destination and tool becomes, the more strongly the fraudsters and criminals come out of the woodwork wanting to take a free ride into a cash-making world of their own.

With the percentages mentioned in this source story, and with the sad statistic that the higher-priced clicks ($2+) being targeted by default, is Google possibly due to advertiser drop-out if click fraud continues to grow? That would be devastating to Google's search advertising revenue, which is funding the entire company right now. Unless advertisers see hefty returns on Google advertising even with click fraud happening to their ads, it does not make sense to continue throwing money down the Internet drain. The click fraud light is shining on Google -- and GOOG shareholders should be wary of the light that could shine on your holdings.