Search Engine Positioning and Web Marketing News

That's according to a report in the Wall Street Journal, which says that plaintiffs in the US filed a lawsuit in February alleging that not only do the likes of Google and Yahoo overcharge advertisers, they collude with each other to continue doing so.

In the pay-per-click model that Google, Yahoo and Ask Jeeves use, advertisers pay each time a user "clicks through" on an ad listed alongside search engine results. Each click costs on average between EUR0.30 and EUR0.50 with more popular keywords costing as much as EUR10 per click.

Led by an Arkansas company called Lane's Gifts and Collectibles, the plaintiffs are looking to have the lawsuit certified as a class action. They allege that the defendants, which include Google, Yahoo, FindWhat, Ask Jeeves, America Online and Look Smart, improperly charged advertisers for what they refer to as incidents of "click fraud."

Click fraud is a growing problem in the search industry. The practice has seen people -- such as competitors or unhappy employees -- repeatedly clicking on a pay-per-click advertisement in order to run up a bill for an advertiser. This issue has the potential to cost advertisers a good deal of money and is difficult to track down.

For their part, the search engines such as Google and Yahoo, have said they have anti-fraud systems in place and that they regularly give advertisers refunds for fraudulent clicks. However, they have failed to give any more detail on the subject, causing some advertisers to worry that the problem is bigger than they are being told.

Click fraud statistics from Sempo, a non-profit association that works to increase awareness and promote the value of search engine marketing, indicate that advertisers are concerned about click fraud but haven't been able to seriously track it. Between 36 percent and 58 percent of advertisers say they're worried about click fraud but haven't been able to track the full extent of it, according to a report by Sempo published in December 2004.