Let’s get back to my original beat of e-commerce for a moment.
Forbes has a piece out quoting RBC Caital Markets as calling Google’s planned GBuy program “revolutionary,” and a real challenge to eBay’s PayPal.
That’s not the play.
The play here is defensive. Assuming Google gets to look at enough transaction data to identify “GBuy Trusted Merchants,” it will be seeing enough data to identify scammers as well.
That’s the play. AdSense is being killed by scammers, who create phony Web sites in order to draw traffic to ads that won’t be read or used. It’s killing Google, slowly. Google doesn’t like to talk about it, but others are talking about it.
Rimm-Kaufman published something good on this last week.
Here’s the nugget:
Consider AdSense fraud, where a person or robot clicks on a context ad on an AdSense publisher site for the sole purpose of incurring the click charge.
As before, the advertiser is harmed. But who benefits? Again, Google makes a few cents. But more importantly, the publisher makes a few cents. And unlike AdWords fraud, AdSense fraud scales extremely well — the publisher can use scripts to create numerous sites easily (even more so now with the AdSense API). Across many many sites, a few cents here and there can add up to meaningful easy money. As the fraud can be spread across many AdSense accounts, it is much harder to detect, even with legions of PhDs. The AdSense click universe can grow quickly, driven by manufactured clicks on fake sites.
This is what Google has to protect, or it will die. In order to do this it needs access to data. With access to data Google will be learn to distinguish honest merchants from frauds. And it can cut down on the fraud.
It seems eBay senses this link is meaningful, which is why it is moving
into the AdSense space even as Google’s losses mount. and eBay aren’t without scanners. The number of phony auction
scams is legion. I doubt eBay would be moving to making the problem
worse if it were not aware of the data-fraud connection.
But given the difficulty eBay and Google are having policing their
businesses, is it any wonder folks question whether the NSA can really
defeat terrorism with data scaled 10,000 times beyond that?
