DealBook reports that many on Wall Street are experiencing a heavy dose of schadenfreude at the demise of New York Governor Eliot Spitzer's political career. After all, this is a guy who made his name as the "sheriff of Wall Street," conducting a high-profile campaign of charges and settlements that exposed widespread malfeasance in the financial markets.

Disgraced former analyst Henry Blodget, who was exposed as a shill for investment bankers, posted a New York Post story on Spitzer's downfall on his blog, and other enemies Spitzer made during his anti-corruption crusade are coming out of the woodwork to cast their stones.

But here's the thing: the fact that Eliot Spitzer has a fondness for unsafe sex with $5000 prostitutes doesn't make Henry Blodget any less of a cheater, nor does it detract from the tremendous public good that Spitzer did in exposing self-serving shenanigans in the New York financial district -- even if his motives and character were less than pure.

Spitzer was 100% right when he said in his brief statement that "politics in the long run is about individuals. It is about ideas, the public good and doing what's best for the state of New York."

As Herb Greenberg wrote on his blog, this scandal is an "absolutely pathetic end to a brilliant career."

Let's not allow a prostitution ring to distract us from the need to expose corruption on Wall Street

Yahoo!'s profit warning may mean bad news for Google.

Former Wall Street analyst Henry Blodget makes an obvious, but nonetheless important point on his Internet Outsider blog that both Yahoo! Inc. (NASDAQ:YHOO) and Google Inc. (NASDAQ:GOOG) are in the advertising business even though one is known for graphical banners and the other for search.

"In coming days, a parade of analysts will eloquently explain why the trends that are hobbling Yahoo! won't affect Google -- Google's revenue is pay-per-click, Google is a "must buy" for advertisers, Google has a much stronger market position, etc.,'' he writes. "Listen politely, but don't believe it."

Many don't agree with Blodget. RBC Capital Markets analyst Jordan Rohan told the New York Times that he doesn't see a link between Yahoo!'s problem and Google. He told the paper that Yahoo! has had "unusual turnover" among its executives, which may have hurt ad sales. Indeed, other sites including AOL and Ask.com aren't seeing a slowdown, according to the Times. The reason I agree with Blodget, who despite his notorioius past is one of the most astute observers of the Internet, is that Google's growth will come increasingly from branded advertisements, the core of Yahoo!'s business. I realize that's a bit ironic considering that Wall Street punishes Yahoo for not being more like Google in the search.

Google has long argued that search can be used to build awareness of brands.

Henry Blodget has covered click fraud heavily, and it remains a concern to him. It should be a concern to anyone who uses Google Search -- searcher or advertiser. Although the Google folks continue to downplay the click fraud problem -- including a gloss-over response at yesterday's Press Day 2006 --  my belief is that it can not be underestimated, regardless of the sophisticated algorithms in place to detect such mischievous and damaging activity. This Wired article further demonstrates the potential earth-shaking problem at hand. If fraudsters weren't successful, then computer viruses, worms and phishing scams would not be such a large problem.

Ok, I know -- comparing the web search customer to an artificially intelligent computer program designed to spot abnormal click trends is a stretch. But can even the smartest computer programmer possibly anticipate the limitless number of variables an equally-sophisticated programmer may use to unleash click fraud schemes --  and especially for black-coat high-paying customers? It's not just click fraud when a human or manned click farm simply clicks on a Google ad repeatedly -- the bot farms that could (or are) developed most likely appear to click from countries all over the world, spend varying amounts of time on the clicked site, and come from IP addresses that appear unconnected. This is what intelligent click bots do, and they are probably getting better every day.

I'm sure Google -- of all companies -- is way in the forefront of detecting click fraud on its global search network. After all, advertising around search results makes up nearly all of Google's revenue. It's easily in the best interest of Google to keep the tightest of tabs on this kind of activity. However, you can throw that out the window if click fraud becomes a bad public relations situation for Google.

An adage I'm fond of quoting is that perception is reality, and Google's response, so far, is that click fraud is not a problem and they are on top of what little click fraud there is. Google's AI engineers may have this looming issue under control, but the way in which they communicate does not really instill confidence in Google's advertising customers. It will only become worse as a perceived problem unless Google can better communicate that they can quash this issue. Perception is reality to the rest of the world, including the public market.

Update: this blog post over at Cnet tells of a lower-than-30% click fraud rate that purports to be more realistic. We aren't so sure.