| Microsoft Plays Whac-A-Fraudster |
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Yesterday Microsoft filed suit in U.S. District Court in Seattle against 3 members of a Vancouver BC family, accusing them of “perpetrating a massive ‘click fraud’ scheme on the online advertising network operated by Microsoft”. The defendants are brothers Eric and Gordon Lam and their mother, Melanie Suen. According to the NY Times: “Microsoft’s theory is that Mr. Lam was running or working for low-ranking sites that took potential client information for auto insurers. The complaint said that he directed traffic to competitors’ Web sites so they would pay for those clicks and exhaust their advertising budgets quickly, which let the lower-ranking sites that he sponsored move up in the paid-search results. When people clicked through to his site, it asked them to supply contact information, which he then resold to auto insurance companies, according to Microsoft’s complaint, which estimated his profit at $250,000. In the complaint, it also said it had to credit back $1.5 million to advertisers because of the Lams’ alleged fake clicks. Microsoft is seeking $750,000 in damages from the defendants.” It’d be nice if Microsoft could win this one. But it’s ultimately a game of Whac-A-Mole — another click fraudster will always pop up. ClickForensics estimates the rate at 13.8% for the first quarter of 2009 (down from the record of 17.1% set in 4Q 2008), but Danny Sullivan of Search Engine Land says the rate is actually much lower. No matter — click fraud is always a good story for the mainstream press. |
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Submitted by: Dan Giancaterino, Internet Librarian
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Comments (0)October 1, 2008
| Brinkmanship |
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Wired reports today that Apple has threatened to shut down the iTunes Store if the Copyright Royalty Board votes on Thursday to increase by .06 the royalties paid to publishers and songwriters. That’s right, they’ll close down iTunes. Apple pays about $.70 per song to the record companies, with the royalties taken from that. Apple gets the other $.29. That’s not much of a margin for Apple. They obviously don’t want to have to absorb the royalty increase, nor do they want to raise the price of songs from $.99 to $1.05. In testimony [it's a ginormous PDF, so you're forewarned] before the CRB, Eddy Cue, Global Vice President of iTunes, said: “Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate iTS if it were no longer possible to do so profitably.” (Excerpted from page 3 of the testimony.) Why the brinkmanship? After all, Apple is a $98 billion dollar company. The royalty increase is like chump change, right? Let’s do the math. In 2007, U.S. music fans downloaded 844 million songs from online stores. (Source: WSJ, subscription required.) Apple controls 85% of that market. (Source: TechCrunch.) Apple makes $.29 from every song they sell. So their income from U.S. iTunes song sales is about $218 million. The extra royalties would be around $45 million, about 21% of Apple’s U.S. iTunes profit. So the royalty increase is, relatively speaking, significant. But does that warrant closing the iTunes Store? No way. Apple would sell less iPods — 3Q 2008 revenue: $1.7 billion — the real reason why iTunes exists in the first place. They just want to break even on iTunes. And they’re trying to get people’s attention, that’s all. |
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Submitted by: Dan Giancaterino, Internet Librarian
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September 8, 2008
| Like Google’s Not an Advertising Monopoly Already [UPDATED] |
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The Association of National Advertisers, which represents 400 companies, has publicly opposed the Google-Yahoo advertising partnership, announced in June to keep Yahoo afloat after it miscalculated mismanaged walked away from acquisition negotiations with Microsoft. (Coverage here and here.) The ANA feels that “the partnership will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising.” Let’s be real. Google controls more than 60% of the U.S. search market, no matter whose data you consider. Yahoo and Microsoft together do not equal half of Google’s market share. And together they’ve lost more than 4% market share in the last year. As I blogged last week, they own online advertising. Last December the U.S. Federal Trade Commission approved Google’s acquisition of DoubleClick, the leader in online banner ads. We’ll have to wait and see how the Justice Department feels about their advertising partnership with Yahoo. Update, September 9: Looks like the Justice Department doesn’t feel too good about it. |
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Submitted by: Dan Giancaterino, Internet Librarian
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September 2, 2008
| Don’t Quit Your Day Job |
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When you can get paid for breaking CAPTCHAs at night. Moral of the story: When you have a large workforce willing to point-and-click repeatedly for low wages, you can pretty much crack any security system technology throws at you. |
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Submitted by: Dan Giancaterino, Internet Librarian
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December 5, 2007
| Facebook’s Beacon: Just When You Thought It Couldn’t Get Any Worse |
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On Monday TechCrunch reported more shady business with Facebook’s Beacon advertising system. I’ll sum it all up:
Let’s just think about that last item for a minute. Beacon advertising partners are basically dumping all their purchase data on Facebook so that Facebook can data-mine it. Does that seem right to you? I didn’t think so. Facebook claims that they are deleting all the data that isn’t relevant to news alerts that members have explicity okayed. But they also claimed that “as long as you are logged out of Facebook, no actions you have taken on other websites can be sent to Facebook” until they were outed by a security researcher at Computer Associates. Update: Mark Zuckerberg posted an apology about the whole Beacon mess on the Facebook Blog today. More importantly, he said that you can now opt-out of Beacon permanently. Unfortunately, the partners are still going to give Facebook all their purchase data: “If you select that you don’t want to share some Beacon actions or if you turn off Beacon, then Facebook won’t store those actions even when partners send them to Facebook.” (my ephasis) |
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Submitted by: Dan Giancaterino, Internet Librarian
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November 30, 2007
| Dan Bought a Cordless Drill at Target Last Friday |
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Black and Decker, 24v. With 115 bits. At 7:45 am. Boy, was the store crowded. Whaddaya mean you don’t care? Obviously you’re not a Facebook user. Last week they launched Beacon, an advertising program that sends your Facebook friends news about what you’ve purchased from online partners such as Overstock.com, Travelocity, and Fandango. Beacon has ticked a lot of Facebookers off. News stories tell about holiday and birthday purchases that have been inadvertantly revealed to their recipients. To date more than 50,000 people have signed a petition requesting that Facebook modify Beacon. The crux of the issue is that they want to be able to click one box in their profile to opt-out of Beacon for good. Facebook won’t let them. They’ve modified Beacon so that you have to explicitly OK a news alert about your purchase. (Give them credit for that.) But this points out the problem with being a social networking site valued at $15 billion. You have to turn the eyeballs into revenue, or you won’t be valued at $15 billion much longer. |
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Submitted by: Dan Giancaterino, Internet Librarian
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April 3, 2007
| Web Hosting Deal |
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Hurry this one ends tonight! GoDaddy is offering 20% off on any of their 12 or 24 month hosting plans. |
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Submitted by: Nicole Engard, Former Web Manager
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September 8, 2006
| Maybe I Could Just, Uh, Watch a Movie While the Other One’s Downloading |
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The NY Times has an article today (registration required) about Amazon’s new “AmazonUnbox” service, which lets you download movies to watch on your computer. You can’t, however, burn them to DVD. The following quote caught my eye: “Amazon says its movie service improves on others because the video quality is higher. That quality comes at a price: longer download times … Amazon says the typical movie will take two to seven hours to download, depending on the connection speed of the user.” How convenient. Let’s do the math here. Target is a 10 minute walk away. Say 15 minutes to browse their DVD offerings and 5 to get through checkout. Another 10 minutes to walk home. (Maybe longer if I stop at Famous Dave’s BBQ next door. But we’ll say no more about that.) Tack on 10 minutes for opening the package, getting a soda from the fridge and going pee. Bingo … ready to watch the DVD in less than an hour. I love the real world. |
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Submitted by: Dan Giancaterino, Internet Librarian
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August 28, 2006
| Sick of This Yet? |
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Perhaps this will be the last posting on this topic for awhile. But I doubt it, ’cause Google’s got $10 billion burning a hole in its pocket and it’s going to wind up buying somebody soon. Anyway, today Google announced a deal with eBay: “Google will become the exclusive text-based advertising provider for eBay outside the United States. In addition, eBay and Google plan to integrate and launch “click-to-call” advertising functionality that leverage both Skype and Google Talk globally in each company’s respective shopping and search platforms.” You may remember that at the end of May Yahoo and eBay announced they were partnering for eBay services inside the U.S. So now the alliances are as follows:
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Submitted by: Dan Giancaterino, Internet Librarian
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July 5, 2006
| The Elephant in the Living Room |
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Today the San Francisco Chronicle gave us the high points of a study of click fraud produced by Outsell Inc.:
Reaction from Google and Yahoo? Google in effect rolled its eyes. Yahoo blamed its stupid advertisers for not understanding the cyclical nature of search term popularity. Not the greatest response from companies that generate much of their revenue — in Google’s case, 99% — from online ads. |
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Submitted by: Dan Giancaterino, Internet Librarian
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