Click fraud article in this week's The Economist.
But as pay-per-click advertising has grown into a huge industry, concern has mounted over so-called “click fraud”—bogus clicks that do not come from genuinely interested customers. It takes two main forms. If you click repeatedly on the advertisements on your own website, or get other people or machines to do so on your behalf, you can generate a stream of bogus commissions. Click fraud can also be used by one company against another: clicking on a rival firm's advertisements can saddle it with a huge bill. Bogus clicks are thought to account for around 10% of all click traffic, though nobody knows for sure.
A few months ago Mr Gross pioneered an alternative to the pay-per-click model. In February Snap, a search engine backed by Mr Gross, launched “pay-per-action”, a new model in which advertisers pay only if a click on an ad is followed by an action such as a purchase or a download. Google is testing a similar model and Turn.com, another ad network, adopted the pay-per-action model a few weeks ago.