This month's Wired Magazine has a pretty interesting article about click fraud and the potential for it to 'swallow the Internet.' As most of you know, 'click fraud' refers to the practice of falsely clicking on pay-per-click ads in an effort to cost a company money or remove its ads on the basis of artificial or contrived non-performance. Here's an example of how it works:

Let's say I go into business selling neck ties on the Internet. I set up a Web site to facilitate the ecommerce and then place some pay-per-click ads with Google to attract visitors. If I happen to notice a competitor's ad showing up in the list with mine, I could simply click on their ads multiple times to drain their onilne ad budget with Google. Ethical? No. But it is happening all too often with Google ad buyers and sellers alike.

The article lays out a number of derivative schemes being employed by scammers and vaguely describes some of the counter-measures being employed by Google and Yahoo. In the end, I feel that this will be a perpetual cat-and-mouse game between both sides. The article seems to suggest that a lack of improved enforcement could threaten the lifeblood of the Internet economy and cause a crash. Below is a diagram that appeared in the article that does a good job of describing how it works.