Wednesday, May 19, 2010

Microsoft Files Lawsuits Over Click Laundering

Redmond-based Microsoft said Wednesday that it is taking legal action against an online publisher, RedOrbit, and its president, Eric Ralls, as well as un-named "John Doe" defendants, as part of a scheme it uncovered to defraud its advertisers through pay-per-click fraud. Microsoft said the firm filed two lawsuits in the U.S. District Court for the Western District of Washington, alleging that the defendants had engaged in "click laundering", which uses malware and other techniques to make it appear that pay-per-click ads were legitimate, even though they were being used to boost clickthroughs on web sites using Microsoft adCenter. Microsoft said the action came after seeing "dramatic and irregular growth" in click traffic on two sites within its network, in what could have defrauded advertisers of hundreds of thousands of dollars.