In the latest episode in the ongoing saga of Google's missteps, Eric Schmidt their CEO has, for some odd reason, admitted that Google is ok with click fraud, and that their advertisers should probably get used to it.  Apparently click fraud (where competitors or paid click monkeys sit and click Google ads to give the advertiser clicks and incur a click cost) is a defect in the Google advertising product that Google is prepared to live with, and better yet have the free market price down their advertising to acccount for the hidden defect.  Almost as an afterthought, he mentions that "we go ahead and try to detect and eliminate it", and it's "great fun" for Google engineers to try to fix it.  I don't know about you, but if Google were my company it would be "great fun" for engineers to fix click fraud in the same way that it's "great fun" for a person to escape a burning building.

I can't believe Google is so cavalierly dismissing click fraud.  This is a huge deal for them, and could break their primary revenue source.  People don't expect to pay for click fraud, they expect to pay for real clicks.  Their advertisers pay for Google to deliver to them a certain number of people, but by Google's own admission now that number is not reliable.  You must guess at the amount of click fraud, calculate that into your clickthru statistics, and THEN you can find out what you're really paying per click.  I can't believe he actually said that.  It's like a TV network admitting that the ratings may be way off and they're not really sure how many viewers you'll get, but you have to price that into your advertising budget and figure out what you should pay.  What fun.