The Vanishing Click-Fraud Case

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"You can't charge extortion unless you explain what you're being extorted over," says Peter Henning, a law professor at Wayne State University and a former Securities & Exchange Commission attorney. "You have to show the economic harm being done."

Mum's the Word

By all appearances, Google faced a difficult dilemma. It could risk divulging information about its approach to click fraud and help make a case against Bradley, who faced a maximum penalty of 20 years in prison, according to a Justice Dept. press release. Or, Google could keep its efforts to detect and quantify click fraud a secret, which could allow Bradley to go unpunished.

Google appears to have taken the latter path, which may have several consequences. Would-be fraudsters still have to guess at how Google sifts out bogus clicks. But allowing an alleged scheme to brazenly conduct click fraud to go unpunished could embolden other fraudsters. In addition, it could undermine the confidence of advertisers, who foot the bill for fraudulent clicks.

After all, prosecutors didn't just have Bradley's alleged extortion attempt. They also had detailed descriptions of Google Clique from a Web site allegedly operated by Bradley, according to the indictment. Among the site's statements: "…we have been able to generate in excess of $30,000 per month using Google Clique across 10 [Google] Adsense accounts." Adsense is Google's offering that displays ads on partner Web pages.

Crying Wolf

Marketers are already anxious about fraud. A study by the Search Engine Marketing Professional Organization (SEMPO) slated for release on Dec. 4 found that 71% of advertisers are "worried" about click fraud, or describe it as a "moderate" or "significant" problem. That's down slightly from a year ago, but still a sizable issue.

Another concern for Google could be its future ability to bring law enforcement to the table on click-fraud issues. If Google was unwilling to cooperate this time, prosecutors may be less willing to press charges in the future. "The next time this comes up, are prosecutors going to listen to you again?" asks Wayne State's Henning.

If that's the case, more was lost in the case of Michael Anthony Bradley than just one alleged perpetrator.

Elgin is a correspondent in BusinessWeek's Silicon Valley bureau.