• TechCrunch, Friday, June 26, 2009 11 AM

Earlier this week, Michael Arrington at TechCrunch broke the story of rampant click fraud at Facebook. Today, he has details on how the fraudsters are doing it. On Google, you can simply sign up for an AdSense account and put the ads you want to target on parked domain names and simply run a program to keep clicking on those ads. "The search engines fight this via obvious and not so obvious means, and an arms race begins," Arrington says.

Facebook is a little bit different, as there's no AdSense. Instead, fraudsters hire outside firms to create fake Facebook accounts with a wide variety of demographic information that would trigger the appearance of competitors' ads. One source says the cost is just $10 per 100 accounts as long as you supply unique email accounts. The fraudster then logs into Facebook through these accounts, and a software program automatically starts clicking on the right competitive ads.

Facebook allows any account to click a given ad up to six times in a 24-hour period. However, often times, the fraudsters' bot program clicks on the ads so fast that the underlying URL isn't registered by the advertisers' server. This means that Facebook still sees and charges for the click, but the advertiser never registers a page view, so they can't even see the traffic from the bot programs. Facebook says it's aware of the problem and is fighting it, but the social net was reluctant to give details, because it didn't want to exacerbate the problem.

You might be wondering what the incentive is here for fraudsters. According to Arrington, advertisers are clicking on competitor ads to frustrate them, causing them to leave the system. In turn, this drives prices down. Others do it simply as a defensive maneuver.

Read the whole story at TechCrunch »