Wednesday, June 14, 2006

CNBC's amazing google clickfraud video


A specter is haunting Google. Google derives the majority of its revenues from selling tiny text ads. Lots of internet publishers publish tiny text ads. Since advertising is sold on cost-per-click basis, the more clicks the more revenues for (GOOG) and publishers.

Some unscrupulous publishers have tried to accelerate the ad clicking process with click bots and other schemes. Google has a very logical reason to ignore clickfraud, since doing something about it would lower revenues and collapse the share price.

Depending on who you ask: click fraud is insignificant (Google) or upwards of 70% of Google's total ad sales. The problem and issues for abuse are well known in the webmaster community. The broader world is mostly unaware of Google’s fraudulent profits.

Lots of Wall Street analysts, many of them working for companies that have extensive underwriting relationships with Google, continue to maintain buy and strong buy ratings on shares of GOOG. Many of them also engage in fanciful revenue projections.

Today CNBC did a feature on clickfraud. Now everyone on Wall Street knows about the issue and just how bad it is. I predict that real soon now, a wave of analyst reports will come out minimizing the issue and its impact on the demand for tiny text ads from Google. But if advertisers know that at least 70% of their ad spending on Google is wasted, how many will continue to buy ads?.

Google insiders probably know about the problem as well, as collectively they have sold well over $3 Billion worth of shares in the past six months. That is more stock than Enron insiders sold in the six years prior to bankruptcy. Sometimes the sheep do shear themselves.

4 Comments:

At June 17, 2006 7:23 AM, Anonymous hippiepooter said...

Hi M-P.

Pardon me for the off-topic nature of this post, but unfortunately it appears, for the time being at least, the B-BBC Contributor who was surreptitiously unbanning me has now been cowed by Andrew's wrath.

The issue I raised about Andrew was not whether he should go or stay (as Andrew conveniently chose to reframe it), it was whether the links I posted about his behaviour as moderator did credit or discredit to B-BBC or the cause against BBC bias in general.

In my view, if this critical cause for British democracy is going to progress beyond the internet and make serious inroads, it needs moral people to lead. As the Gramscians who posted on the thread confirm, if there has to be a website against BBC bias, Andrew is the man the BBC would wish to run it.

Also it's probably worth mentioning, that contrary to Andrew's spin, the reason he banned me in the first place was for giving him short shrift for referring to me as a "swivel eyed loon" for stating certain BBC journalists and George Galloway should be investigated by MI5 for Treason for aiding and abetting the enemy at time of war. Andrew had received a 'scarey letter' from the BBC legal dept previously that had him runnning around like a headless chicken acting as a BBC enforcer and insulting B-BBC commenters.

 
At June 17, 2006 7:29 AM, Anonymous hippiepooter said...

Oh, sorry, one last thing - David Cameron is a socialist too!

 
At June 19, 2006 5:41 PM, Blogger Market Participant said...

Well, it really is BBBC's gang's blog. Ultimately the question is do you run this for your own entertainment or do you run it to change the world?

 
At June 20, 2006 10:00 AM, Anonymous hippiepooter said...

I hope this ambiguous reply doesn't lead to the Andrewperson holding a grudge against you when you next post!

 

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