Google: No, We Don't Let Click Fraud Happen

We posted earlier about Google CEO Eric Schmidt quoted as saying click fraud was "self correcting" with an economic solution of "let it happen." Those quotes got the blogosphere buzzing. Google's now responded on its official blog in "Let click fraud happen"? Uh, no., to say that Schmidt was talking about hypothetical approaches to click fraud rather than what Google itself does. The post also links to the entire presentation, so people can watch and judge for themselves.

Postscript: I've had a chance to listen to the key part now (it begins at 31 minutes, 11 seconds into the video), and the context is important. Schmidt was specifically asked if there was an economic solution to click fraud, as opposed to a technological one.

The "great fun" comment he makes about click fraud for Google's engineers comes at 32:39 and is part of him saying immediately before this that Google "worries about [click fraud] a lot" and the fun is trying to say ahead of the challenge.

Then at 32:45, he says:

Let's imagine for purposes of argument that click fraud were not policed by Google, and it were rampant. Eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks. In other words, the value of the ad declines. So over some amount of time, the system is in fact self correcting. In fact, that there is a perfect economic solution which is to let it happen. But because it is a bad thing, and because we don't like it and because it does, at least for the short term, create some problems before the advertiser sees it, we go ahead and try and detect it and eliminate it.

Postscript 2: Donna Bogatin in Challenge to Google's Eric and Shuman: Be real men, don't selectively hide the 'world's information' pushes back at Google suggesting things weren't in context in her original post.

Postscript 3 by Barry: Google has added a link back to Donna's original article this weekend. See the link at the top of Google's blog post in blue underlined, "quoting."