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.

Yahoo! appoints chief fraud buster -- will this really help? originally appeared on BloggingStocks on Thu, 22 Mar 2007 10:21:00 EST. Please see our terms for use of feeds.