July 2006 - Posts

Click Fraud - The Final Frontier
This post is a bit of a continuation of some of my prior posts on Google’s Adsense along with some new material pertaining to the 47-page report by Alexander Tuzhilin that was submitted for The Lane’s Gifts v. Google Report case.  Those of you who have been following my blog will recall that I have written about Adsense several times and in each of those posts I have tried to stress how important both Adsense and Adwords are to smaller or less established publishers.  Namely, that Adsense and Adwords give lesser known websites an opportunity to grow and expand their user base as well as generate residual income that allow them to compete with larger entities and mainstream websites.

Recently however, Google’s Adsense has been under attack by the legal system, the media, and the general public for its policies regarding click fraud.  Consequently Google was taken to court in February and eventually a 90 million dollar settlement was reached.  Also resulting from the case was the 47-page report that will be the focal point for the remainder of this post.

I’m assuming that since all of you are die-hard Google fanatics, you have probably already read the pithy report and much of what I write will simply serve as a reminder of what you already learned.  But, for the few of you who didn’t make it through all 47 pages (Donna you’re in this group. I checked your blog, where your posts on the subject were comprised of a slew of excerpts from the paper with no original commentary, once again proving that you don’t actually care about the matter of click fraud, but simply want to find anyway possible to write negative articles with regards to Google, thereby promoting your personal vendetta against them.)

Alexander Tuzhilin was asked to determine if Google has made reasonable efforts to combat click fraud.  In the first paragraph he says, “I conclude that Google’s efforts to combat click fraud are reasonable.  In the rest of this report, I elaborate this point.” The interesting part of this conclusion is that in section 9.5 (p. 41-44) he explains that his conclusion is based solely on indirect evidence. Not only is the evidence indirect, but it is also statistical in nature, for which I’ll remind you of a quote made famous by Mark Twain, “There are three kinds of lies: lies, damned lies and statistics."

Dr. Tuzhilin concludes that Google made reasonable efforts based on evidence that he states is “not hard enough” and continues on to say that “he is used to dealing with much more conclusive evidence” (p.43).  He says on the final page of the report, “There is no hard data that can actually prove this statement” (p.47).  There are two very interesting points about this inconclusive evidence that I wish to share with you.

First, there are a number of people outside of Google (and other search engines) who seem to think they know exactly how big the problem of click fraud has become.  They claim to have statistical evidence of click fraud and boast fraudulent percentages as high as 30 percent. I find it interesting that these organizations (see here and here) can come to such conclusive evidence, but a highly educated and informed Tuzhilin with inside knowledge of the advertising system cannot.  

Secondly, there is one point where Dr. Tuzhilin was able to conclusively find evidence of click fraud, and this is most definitely the highlight of the findings disclosed in the paper.  I am referring here to Google’s double-click policy.  Google had been counting double-clicks as valid clicks (charging the advertiser for both the first and second clicks) until just recently, when they changed their policy in March 2005.  Double clicking Internet links stems from the habit of double clicking Windows icons/applications and is fairly common.  

It is hard to say exactly how much extra revenue was generated from these double clicks, but Dr. Tuzhilin points out that it was a “non-trivial” amount (Section 9.1.4 p 29).  Even more interesting is that from the very beginning of the Cost Per Click advertising model, Google decided to eliminate the third and fourth clicks and considered them invalid.  Stated in a slightly different format the logic can be shown as follows:

1st Click – valid, 2nd Click – valid, 3rd Click – invalid, 4th Click – invalid.

Do no evil Google?  Well, nobody is perfect including Google.  There are a few other points worth mentioning but I’ll save those for another time.  

There are two things worth noting in case you get in a discussion with you’re a co-worker on this topic and haven’t read the report.  First, there is no conclusive evidence about how well Google is combating click fraud or even how big of a problem click fraud has become.  Second, Google was at least dishonest in the counting of double clicks when clearly they knew this was wrong as evidence by the fact that they counted the third and fourth clicks as invalid.

Click fraud is such an important topic to discuss because of its implications to the economy of the Internet.  I plan on posting a second part to this article to discuss why I think the CPA (Cost Per Action) click model is absurd for most advertising applications.

Posted: Monday, July 31, 2006 3:10 AM by Google Fact with 1 comment(s)

Why I Love Lawyers
On Friday, Google made public through legal proceedings, various additional details pertaining to the ongoing click fraud circus (CFC). You can read the full news from this link.  

I’m about 20 pages into the 47 page document written by Alexander Tuzhilin, which is a very insightful read.  I’m looking forward to finishing it up and providing some more commentary on click fraud, which is certainly more research than we can expect from Donna over at ZDNet, maybe I should apply for her job.

Reading through the 17 page objections document Google released, I found it quite interesting that the lawyers are entitled to no more than 30 million dollars of the 90 million dollar settlement.  I love this country!  I just wish the business model for lawyers applied in other professions.

More to come soon.   

Posted: Tuesday, July 25, 2006 3:48 PM by Google Fact with no comments

Eric Schmidt on Google and Economics - Part 2

Typically I stay out of the he said she said type of blog content but I decided to add a few comments on the matter after Krupo's recent post.  This second part is closely related to my previous blog post in context but not in content.

Let me start by naming all parties that will be discussed in this post, simply to ensure that my manhood is not questioned in regards to this post. Listed in order of power and influence from greatest to least, Eric Schmidt - CEO of Google, Shuman Ghosemajumder, Business Product Manager, Trust & Safety, Google, Donna Bogatin, ZDNet blogger.  

Along the same lines of thought, I'd also like to ensure that this post stays consistent with my commitment to help Google organize the world’s information and make it universally accessible, and so I'll include all of the links that relate to this story in a date stamped bulleted fashion.

  • March - Eric speaks at the 2006 SIEPR economics event, see this link
  • July 9th - Donna Bogatin writes dense blog post #1, see this link
  • July 14th - Shuman G. writes original response to click fraud allegations, see this link
  • July 14th - Donna Bogatin writes dense blog post #2, see this link
  • July 1(5-7)th-ish - Shuman G. updates original response, see this link
  • July 17th - Donna Bogatin writes dense blog post #3, see this link

Now, in my blogging rule book three stupid posts equals an out, so Donna, congratulations on being the first blogger to strike out in my blogosphere.

If you view the content in the order listed above you will quickly realize what happened, and I'll summarize it briefly for those of you who don't care to spend the 1+ hours it would take to view all of the content discussed. 

Eric makes a great speach at the SIEPR conference on Google and related economic topics.  Donna (obviously didn't watch the video and) thinks that the conference is about Google's new policy for dealing with adsense/adwords and click fraud.  The conference was in actuality on economic policys in general, but particularly those that affect Google's business practices, held in a question and answer formatted discussion. 

The brilliant question which prompted the response from Eric that Donna misquoted was asked by an intelligent Stanford student (and I'm paraphrasing), "Ignoring the fact that we know there are technical solutions to click fraud, is there an economic solution to click fraud?". Eric proceeded to explain that he believes there, in theory, is an economic solution to click fraud. 

Donna then takes his explanation out of context and accuses Google of encouraging click fraud through ignorance on the issue. 

Google responds to deny the allegations made by Donna.

Donna then complains that Google's original response was inadequate because they didn't bring attention (traffic) to her and her blog. 

Google then gives her the attention she requests by updating the original post and adding a link back to Donna's blog in the updated revised post. 

Donna then makes a post with an "I Love Google" image and short post never apologizing to Google for her lack of research and showing her complete ignorance on the click fraud issue.

Oh yea, I almost forgot to mention that I did learn one thing from Donna, namely why I never see ZDNet articles in my Google search results.

 

Posted: Monday, July 17, 2006 9:36 PM by Google Fact with no comments

Eric Schmidt on Google and Economics - Part 1
I am, if you haven't noticed, a huge fan of Google.  I love what Google does, who they are, and who they represent.  There are millions of documents on the Internet, most of which are unrelated to the information we are trying to find at any given moment.  Google allows us to find these documents and in a very timely fashion which is something many search engines still haven't figure out.  

I've noticed this trend to redesign and remarket a search engine in the hopes to gain more users.  The problem with this is that no matter how good your search engine looks or how much you spend to advertise your search engine, people aren't going to use it unless they can find the information they are looking for quickly, something Google does magnificently.

Google has found a great leader in Eric and he continues to help the company grow and produce exceptional products and services.  He spoke several months ago at Stanford on economics, to an economics audience and thanks to Google Video, those of us who couldn't be there can still enjoy the talk (see this link). 

Eric talked about a variety of topics and policies, many of which were more indirectly related to economics then directly related.  The talk was in a question and answer format and he addressed  many "hot topics" including Net Neutrality, Google and China, and Click Fraud.  I enjoyed this 37 minute video from the CEO of Google and if you are a fan of Google you probably will too.  The ability to hear and see this talk is just another reason why I can't get enough Google.

Posted: Monday, July 17, 2006 2:59 PM by Google Fact with 1 comment(s)

Buy Online with Google Checkout
A couple weeks ago Google announced the release of their new checkout service.  Talk about the service has been around for several months and was highly anticipated by shareholders of Google stock.

What is the checkout service?  Simply stated it is Google's version of Paypal.  Google already does quite a bit of online transcactions through adwords/adsense, video, and others, so it only made sense for them to go vertical in the online transaction processing business.

What does this mean for you?  Not a whole lot unless you own a storefront.  It will take Google several years to integrate its service with major Internet business players.  What is more likely is that new services entering the market may consider using Google's checkout as opposed to using a competing service provider. 

If however you own a website storefont, you might consider using Google's service simply for its massive user base where Google has a huge advantage over other service providers (except for maybe the Paypal / Ebay combo).  You can checkout (no pun intended) the all of the features at http://checkout.google.com

Posted: Thursday, July 13, 2006 1:21 PM by Google Fact with no comments

Subtle development at Google Maps
Guest post by Krupo
Hop over to Google Maps if you haven't been there lately. The interface has undergone subtle tweaks, including a slightly prettier colour scheme (orange tabs!), and most impressively, "smooth zoom" scrolling.

I've already forgotten the details behind the old zoom system, but I love how it now works. Instead of the herky-jerky skipping motion you get when changing zoom levels, which I now only vaguely recall, now you see the whole screen 'slide' in or out somewhat crudely, but it's very smooth.

Aesthetically, it just feels better.

A wonderful tool/toy just got better.

Posted: Wednesday, July 12, 2006 7:15 PM by Krupo with 3 comment(s)

What You Missed in Las Vegas
I recently took a trip out to Las Vegas to participate in the 2006 World Comp proceedings. I had a great time while I was there and learned a few things along the way. 

On the plane trip I had the opportunity to meet the creator of the SleepTracker watch.  He is a great guy, real nice, and the watch has received raving reviews including the praise of Time Magazine and CES.

I learned about CSound, a structured audio (mpeg 4) tool that allows you to programmatically generate sound waves, from Barry Vercoe, one of the keynote speakers.  This free software is the same software that has been used to create Hollywood movies like Stealth.  I downloaded the software when I got home and found it to be fascinating.  The only problem I have with the language and tools is the huge learning curve that is associated with the development and use of the software. 

Additionally, Barry presented the One Laptop Per Child organization to us, which I also found to be quite interesting. The laptop being created will require very little power such that the battery can be charged using solar or pedal based power.

One evening I had the opportunity to see the Blue Man Group at The Venetian.  I found them to be a wonderful relief from the technical and academic aspects of the conference.  The show was entertaining and humurous, and even included a number of interesting facts about various topics including the human eye, and U.S. population, all of which were presented in an entertaining manor.  If you have the opportunity to see them on their tour, I would highly recommend it as a "must see".

Finally, a few minor recommendations when going to Las Vegas:
  • Play the Penny Slot Machines.  You can play for several hours on a couple bucks and have a blast. (No I am not advocating gambling)
  • Stay at The Venetian, if you can afford it, which I can't.
  • If you can't afford to stay at The Venetian, then stay at Treasure Island.
  • Do go see the Blue Man Group.
  • Don't expect cheap food or cheap airfare, those days are over.
  • Stop by the MGM to see their lion exhibit.
  • Go see the Grand Canyon and Hover Dam on a hellicopter tour.
There we go, now you don't have to feel like you missed anything in Las Vegas.

Posted: Wednesday, July 05, 2006 2:50 PM by Google Fact with no comments