Category: Misc

Facebook rolled out a comprehensive upgrade to its Groups feature on Wednesday, but judging by some of the responses from both high-profile users and regular Facebook fans, the ability to “tag” anyone and add them to a group automatically is not winning the company much support. For some, this feature appears to be another example of Facebook’s preference for opting people in to new services by default and forcing them to opt out, which it did with the recently launched Facebook Places as well. Others, however, greeted the new Groups with open arms and said that the new features might even replace Twitter for some of their conversations — words that will probably be music to CEO Mark Zuckerberg’s ears.

One of the more vocal opponents of the new Groups feature is entrepreneur Jason Calacanis, founder and CEO of Mahalo, who published an email he wrote to Zuckerberg and chief operating officer Sheryl Sandberg about being auto-added to a group called NAMBLA (the North American Man-Boy Love Association). According to Calacanis, he was never asked to join the group, and was not informed that he was “force-joined” to the group. He closed the email by saying: “If you guys want to run these new features by me before you launch
them, I can probably save you from a couple of privacy law suits each year.”

Anil Dash, founder of Expert Labs, said Thursday morning on Twitter: “Oh, Facebook. I wanted to like groups, but now I’m on 50 unwanted email lists. More incompetent defaults, or an attempt to undermine email?” Others complained about a deluge of auto-add emails from Facebook Groups, including Daniel Victor, the online community manager for TED.com, who said Thursday: “I’d rather be invited than added to a group on Facebook. Woke up with 45 unexpected e-mail notifications today. Spammer’s dream.” Among those who also weren’t impressed with the rollout were technology blogger Dwight Silverman and Socialtext co-founder Adina Levin, who said that the implementation of Groups “has some serious social design flaws.”.

Laura Fitton, co-founder of the Twitter app directory oneforty.com, asked on Twitter “Did Facebook simply “forget” 15 years of email list best practices? ie, email lists should be opt in, not opt out?” Liz asked Mark Zuckerberg about the auto-adding feature during her interview with the CEO on Wednesday, and he said the idea was to “make it as easy as possible” and to enourage “self-selection” — suggesting that groups which might try to trick you into joining would not prosper. He and Groups manager Justin Shaffer (who joined Facebook via the recent acquisition of his company Hot Potato) also noted that you can turn groups off, you can leave a group with a single click, and once you leave a group you can’t be re-added to it without your permission.

Despite the criticisms, however, there were some fans who seemed to take to the new Facebook Groups features fairly quickly — and several who said that they could see using the new service more than Twitter in some cases. Journalism professor Jen Lee Reeves wrote a blog post describing how the new implementation of Groups seems more “alive” than it did before, and added that while she used to use Twitter for such conversations, “this changes it all.” Francine Hardaway of Stealth Partners, meanwhile, said Thursday morning on Twitter that Groups had produced an “amazing transformation” and that “in one day, all the action in my “intellectual” life switched from Twitter to FB groups.”

Angel investor Dave McClure has added a roster of mentors and advisors to the team at his recently launched seed fund/incubator 500 Startups — a group that he has decided to call (not surprisingly) 500 Mentors. Although there aren’t actually 500 people on the list, it is a fairly impressive collection of talent that McClure says will be available to help the startups that he is investing in, some of which include Foodspotting and Flowtown. The mentors include Google’s “open advocate” Chris Messina, Josh Elman of Twitter, Slideshare CEO and co-founder Rashmi Sinha of SlideShare and Hunter Walk of YouTube.

Playing on the recent AngelGate furore — in which McClure played a role after being singled out for mention in super-angel Ron Conway’s leaked email on the topic — the startup investor described the mentor team as “a super-secret society of powerful tech-heads [that is] gathering their forces even as we speak, coming together with a shared mission of world domination – er, no, wait, we mean souped-up startup support.” McClure said that while many of the mentors come from the Bay Area, others come from a range of cities, including Seattle, Boston, New York, Vancouver, Tokyo and Paris. The advisors will be available for one-on-one discussions as well as presentations and advice, and some will even be working from 500 Startups headquarters, he said.

The full list of mentors is embedded below. McClure also named another group of “venture advisors” that is much smaller, including Brady Forrest of O’Reilly Radar, Rashmi Sinha of SlideShare, Dave Schappell of TeachStreet, Sean Ellis of Startup Marketing and Hiten Shah of KISSMetrics.

I had a chance to talk with Union Square Ventures partner Fred Wilson this morning, both during and after a meeting he had with half a dozen startups at the offices of Extreme Venture Partners, a fund and incubator with dual headquarters in Toronto and San Francisco. Wilson — whose firm has a stake in a few companies you may have heard of, such as Twitter, Foursquare and Zynga — came to town in order to meet with both venture investors and startups with a view towards possibly investing in some Canadian companies, and said afterwards that the Toronto startup environment “reminds me a lot of New York.”

I’m going to write a separate post about some of the companies that Wilson met with and his thoughts on the local startup ecosystem, but during our conversation the venture investor also had some comments about the recent “AngelGate” clash between “super-angels” and traditional VCs, as well as some advice about what some of the big trends are online that he is thinking about as he makes investments for Union Square.

On AngelGate:

The reality is that that market has changed a lot in the last two or three years. There’s a lot more money out there, it’s gotten very competitive. And usually what happens when things get competitive is prices get bid up, terms change, and the early participants feel it — they can’t win every deal, they can’t be in every deal and I think people start to get nervous. I think that’s largely what you’re seeing. You’re seeing people who’ve been in the market for a long time worrying about the fact that their market position isn’t what it used to be.

Is there too much money? I think it depends who you ask. Certainly for entrepreneurs there’s not too much money. But for people who used to be able to get into every deal at really great valuations, yeah there’s too much money for them — but for the market as a whole I’m not that worried about it. It’s certainly a good thing for me as an investor because more opportunities are getting funded, and it’s certainly good for entrepreneurs because more of them getting funded, so I think largely it’s a good thing.

Wilson also talks in the video about whether the so-called AngelGate meeting represented “collusion,” and whether some of what happened was a result of personal egos getting out of joint. During the startup meeting he attended, when asked about the “super-angel” phenomenon, Wilson said that he thinks on balance it can be a very positive thing for VCs like Union Square. “If someone wants to put in $250K and work as hard as I do, even though I’ve invested a lot more? I say bring it on,” Wilson said. “That’s a home run for me and a home run for the entrepreneur.” Among the super-angels who take this approach is Ron Conway of the SV Angel fund, Wilson said — “he works that hard for everyone, regardless of how much he has put in.”

Trends to be aware of:

Globalization is a huge trend. If you look at FB, Twitter, Google — 75 to 80 percent of their users are outside the U.S., so globalization of web services at scale is something I’m really interested in. There are entrepreneurs all over the world creating new web services that are as interesting as those getting created in the traditional tech centres like the Valley, Boston, New York. So globalization is probably the number one thing I’ve been thinking about.

Wilson also talked about the implications of mobility and how he is thinking about that in terms of his investments — and not just mobile with respect to specific devices or services, but how people can participate online from anywhere, and how more and more data is being produced because mobile devices have sensors that can change your experience or add value to it.

What he is thinking about now:

I’m really interested in the intersection between reputation, identity and knowledge — so things like Quora and StackOverflow (a Union Square Ventures portfolio company). These kinds of services use social media in a narrower and maybe higher value way to help people, and that’s really interesting to me. If you look at StackOverflow, developers who do the best job of generating answers to software development issues have their reputations rise in the system, and on the back side of StackOverflow is a job board, and so employers can come in and hire people and see what their reputation is. So when you think about how a Q&A site flows into a job board and how reputation is the key connective tissue there, I think that’s a really fascinating thing.

When it comes to live-blogging news events, plenty of bloggers and journalism outlets use their own in-house tools — but more and more news organizations are turning to all-in-one, cloud-based solutions such as ScribbleLive, a service that sees itself as more than just a live-blogging tool for the Academy Awards or a keynote by Steve Jobs. “We see ourselves as becoming a fully fledged content-management system,” ScribbleLive founder Michael De Monte said during a recent interview in San Francisco.

The company’s software allows news outlets to quickly set up a liveblog that looks and feels like a regular page on their website, complete with all of their branding and sidebar widgets or whatever else is on the page, says De Monte. Other solutions that provide similar live-blogging or live-discussion features — such as Cover It Live, which is owned in part by Demand Media through its Pluck division — restrict the content within a widget or window that can’t be indexed by search engines or easily converted to other formats, De Monte says.

ScribbleLive, which is based in Toronto, recently launched the next generation of its content-management tools, which add a number of different ways of getting content into the live-blog or news discussion. In addition to pulling in Twitter accounts or keywords automatically (which can be filtered to include or exclude specific phrases), the software also allows reporters to contribute their comments via email, SMS, voice-mail or the ScribbleLive web interface, which can be accessed either on the site or via an iPhone app.

During the G20 demonstrations earlier this year in Toronto, for example, De Monte says that one of Canada’s major broadcasters kept a running update of what was happening during the riots by calling a voice-mail number and leaving a message, which the system imported automatically as an audio file. Not all reporters are comfortable with Twitter or SMS, the ScribbleLive founder says, “so we provide whatever means they can feel comfortable with for them to provide their analysis and perspectives on the news.”

The company’s software is used by Reuters and Hearst Television in the U.S., as well as several other news organizations, and has also been used by a number of non-media entities such as Greenpeace, which used ScribbleLive to report on the live demonstration over an oil well. After the event, the searchable pages remain available so that anyone looking for information about that even will be able to find and review the live-blog. “ScribbleLive changes the traditional linear flow of the newsroom to a more dynamic, collaborative process that empowers real-time reporting and audience engagement while ensuring editorial control and journalistic integrity,” De Monte said.

The company was bootstrapped for the first year or so of its development — while De Monte and his partner worked at CTV, a large Canadian media network — then got seed funding from Rogers Ventures in 2009. ScribbleLive just closed a second round of seed financing from Rogers, De Monte says, and is currently looking to raise a Series A round of funding.

The race to create filters for real-time social media — so that companies in particular can track what is being said about them — continues to heat up. In an attempt to stay ahead of the curve, analytics service Trendrr today launched a new version of its social-media dashboard that incorporates location along with the usual Twitter tracking. The service now pulls in data from Foursquare and Gowalla, as well as aggregating “like” activity via Facebook’s open-graph protocol and reputation scores via Klout. But these services don’t come cheap: access to the dashboard starts at $499 a month and goes as high as $2,499 a month for the “enterprise” edition.

The company — which originally launched in 2006 and is a subsidiary of New York-based social-media marketing firm Wiredset — says that it has re-engineered its platform to handle more real-time services such as Facebook and Foursquare. The service competes with other social-media dashboard offerings such as those from Radian6 (which charges $600 a month for an entry-level account) as well as Sysomos and HootSuite. And new analytical services are emerging as well: Tweetmeme founder Nick Halstead launched a data-mining product called Tweetbeat at the Disrupt conference last week that also allows for in-depth tracking of social-media content via semantic analysis, sentiment rankings and reputation scores.

At least for now, Trendrr’s incorporation of location-based services such as Foursquare and Gowalla could set the service apart from some of its competitors. Users can track real-time check-ins, badges, mayorships and other rewards through a local dashboard, and can filter those results based on a user’s gender and other demographic info if available. Customers using the dashboard can respond from within the service, and can see the content from the most influential users first, or create their own ranked lists of influencers. Trendrr also has a built-in sentiment analysis feature that allows corporate users to track responses to their brands and products based on attitudes.

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Trendrr says that its dashboard features allow “marketers to identify swarm behavior in real-time and provides the communications mechanism that will drive transactions and insert brands into conversations around hot topics,” and pitches its service as a tool for what it calls “Chief Listening Officers” who monitor social media for their companies.

The idea that the Internet might be used for scientific collaboration shouldn’t come as much of a surprise, since the Web’s predecessor was originally created as a way to connect researchers at different institutions so they could solve problems together. That said, however, collaboration has accelerated over the past several years, thanks in part to the increasing popularity of “social media” or Web 2.0 tools, which have collectively lowered the barriers to online interaction.

A number of social networks and services devoted specifically to scientific research have sprung up and are growing quickly, including one called Mendeley. An online collaboration tool, it allows scientists and researchers to upload research papers, which the software combs through looking for bibliographic data (author, title, etc.) which are then matched with any other research that already exists in the database.

“You can just drag and drop your collection of PDFs into the software and it’ll automatically extract all the bibliographic data – all of the stuff that you’d usually have to type in manually,” co-founder Victor Henning told the BBC. “What Mendeley is designed to do is give you recommendations which compliment your existing library.”

The software has become popular with some scientists at highly-ranked research institutions such as Stanford, Harvard and Cambridge, and Henning says the service has about 70,000 users, and is growing at a rate of 40 per cent every month.

Many scientists from different disciplines have also adopted the “open source” model favoured by the Linux free software movement and supporters of Wikipedia, the open-source encyclopedia. Project Polymath, for example, uses blogs and wikis to allow people to collaborate on solving complex mathematical problems.

In less than two months, Polymath participants “had worked out an elementary proof, and a manuscript describing the proof is currently being written,” Walter Jessen, a bioinformatician and cancer biologist at Cincinnati Children’s Hospital, told LinuxInsider. “The project demonstrated that many people could work together to solve difficult mathematical problems.”

Another open-source science project is Bizarro’s Bioinformatics Organization, which started in 1998 and uses wiki software to let researchers post models, questions, experiments and discoveries related to biology and informatics. Scientists were “looking for a central location for their open source projects,” founder Jeff Bizarro told LinuxInsider. Today, the organization has 27,000 members from all around the world.

If Bizarro is like Facebook or Wikipedia, a collaborative network called ResearchGate has aspects that are similar to LinkedIn, the corporate social network. While the service allows scientists to search for and connect research done by others to their own work in order to see patterns or relationships that are worth following, it also allows scientists to create profiles and search for or find relationships with other researchers in similar or related disciplines.

ResearchGate, which has 180,000 members, says it wants to create something called “Science 2.0” using social media tools. In this environment, “communication between scientists will accelerate the distribution of new knowledge. Without anonymous review processes, the concept of open-access journals will assure research quality. Science is collaboration, so scientific social networks will facilitate and improve the way scientists collaborate.”

Some scientists are using even newer tools to collaborate — including Google Wave, the new tool launched by the search giant that some describe as a combination between email, instant messaging and a wiki.

“Google Wave offers two specific things,” Cameron Neylon, senior scientist at Britain’s Science and Technology Facilities Council, told the BBC. “What it looks like is this cross of e-mail and instant-messaging, which is great fun. Where it really wins for science is that actually these documents or ‘Waves’ can be made automated so we can connect up documents and ideas with each other.” The power lies in allowing scientists to share a range of objects, he says, from pictures and text to raw data.

Will these new social tools help produce any penicillin or DNA-type breakthroughs? Scientists and researchers who use them say it’s just a matter of time.

Not that long ago, blogs were a mysterious animal that most reputable companies shied away from, an untrustworthy medium populated by cranks in their pyjamas. But at some point over the past year or two, blogs became mainstream, and companies like Microsoft and Hewlett-Packard and even Wal-Mart started turning to them for some good, old-fashioned “word of mouth” advertising. Reaching out to bloggers with offers of gifts seemed like an easy way to do this, and many bloggers were eager to accept — but not all of them disclosed their relationships with the company whose products they had received.

Doing this is now mandatory, the Federal Trade Commission said in newly released rules governing advertising and promotional material on the Internet. The new amendments are the first updates to the FTC’s guide for advertisers since 1980. According to the new rules, a post by a blogger who is paid cash or receives a gift is considered an endorsement and the relationship must be disclosed. According to the FTC, messages posted on Twitter are covered as well.

Richard Cleland, a staff attorney at the FTC’s Bureau of Consumer Protection, told a Fortune blog: “We’re required to update our rules periodically to ensure that they address relevant issues in the marketplace. Social media has become a relevant marketing force, so we started looking at it.” The FTC official said that the commission was concerned about so-called “pay-per-post” websites, where bloggers receive cash or in-kind gifts in return for positive blog reviews.

“The issue here,” he says, “is whether, if the consumer knew of the relationship between the advertisers and the blogger, would it affect the credibility of the blogger’s statements?” Cleland told the Wall Street Journal that the FTC looks at it “from the perspective of the consumer and the principle being that a consumer has the right to know when they’re being pitched a product. It doesn’t matter whether it’s an email or Twitter or someone standing on a street corner.”

One of the companies that likely gave rise to the FTC’s concerns is Izea — formerly known as PayPerPost. The startup’s business involves helping companies with products or services they want to market find bloggers who are willing to write about them in return for payment. Although Izea didn’t initially require bloggers to disclose these payments anywhere, it changed its rules after much criticism from other bloggers such as TechCrunch. Izea founder Ted Murphy says that his company is working with the FTC on standards for disclosure regarding both paid blog posts and Twitter messages.

Not everyone is enamored of the FTC’s new moves, however. Jeff Jarvis, who is both a blogger and a journalism professor at the City University of New York, says that while he despises companies like Izea that pay bloggers for their opinions, he sees the guides as “dreadful overreach that will drag a lot of innocent people into a bureaucratic dragnet.” Among other things, Jarvis says that he is concerned that the rules only apply to bloggers and Twitter, but other forms of publishing are considered able to regulate themselves. Dan Gillmor, director of the Knight Centre for Digital Media Entrepreneurship, said on Twitter that the new rules “are big-brotherish in extreme, unworkable and downright dangerous.”

As a number of observers have noted, however – and as Robert Cleland himself admitted in several interviews about the new rules – the FTC doesn’t have a huge staff available for enforcement, and certainly doesn’t have the kind of staffing it would need to police the entire blogosphere or Twittersphere. As a result, it will likely rely on customer complaints to bring cases forward for investigation.

When eBay bought Skype for $2.6-billion in 2005, it seemed like a marriage made in heaven, at least for Janus Friis and Niklas Zennstrom, co-founders of the free phone-calling app. But there was trouble in paradise from the beginning, trouble that included the Skype duo’s dodgy track record (they co-founded Kazaa, a quasi-legal music sharing network) and a conspicuous lack of synergies between the two companies. Over the past year or so, however, the relationship has gone from merely troubled to outright toxic.

Friis and Zennstrom left the company in 2007, right around the time that eBay took an almost $1-billion writedown on the price it paid for Skype. Although there were no concrete reports at the time of any trouble between the two companies – the Skype founders had by this time launched a new Web-based TV venture called Joost, which has also run into difficulty – the peace and quiet didn’t last long. In March, a company owned by Friis and Zennstrom stopped licensing its peer-to-peer technology (which powers Skype) to eBay. The auction company sued, and the two have been locked in a court battle ever since.

That battle, not surprisingly, has complicated the sale of Skype, which eBay has been trying to unload for some time now. Several months ago, it announced that it had sold 65 per cent of the company for $1.9-billion to a consortium of investors, including several U.S.-based private equity firms – Silver Lake, Index Ventures and Andreessen Horowitz – as well as the Canada Pension Plan Investment Board. All of the prospective buyers have been named in the Skype suit, which according to a statement of claim is accumulating damages at the rate of $75-million every day.

In an interesting twist, the lawsuit also mentions Mike Volpi, a general partner at Index Ventures who was previously the chief executive officer of Joost and until recently was a member of its board of directors. He has since been removed from the board, and the company said last week that it is conducting an investigation into his actions while he was CEO.

With the launch of the Skype founders’ lawsuit, more than just the sale of Skype is in jeopardy. eBay admitted in a securities filing that the claims could leave it unable to operate the free phone-calling service, although it has said in the past that it is working on its own peer-to-peer networking system to replace the one that Skype’s founders still own the rights to. Even if it does create its own version of Skype’s peer-to-peer technology, however, it’s possible that Friis and Zennstrom could argue that it is an unlicensed copy of their software and keep eBay tied up in court for months, if not years.

The irony, of course, is that the money the Skype co-founders are using to fight this epic legal battle – over technology that eBay arguably should have locked up in the first place – is coming from the bags of loot they got from eBay four years ago.

Should Facebook and Google users in the U.S. thank the Canadian government for protecting their privacy? A pretty good case could be made that they should. Both Internet giants have had their hands slapped by the Canadian Privacy Commissioner, and have had to alter their policies as a result (although Facebook is still considering its full response to the CPC complaint), and those changes have had the net result of protecting the privacy of U.S. users as well.

In the case of Facebook, the Privacy Commissioner’s office filed notice last week that the social-network provider’s protection of personal data didn’t meet federal standards on a number of points — 22 of them, to be exact. The government department advised Facebook to alter its practices to bring them into compliance, or possibly face court proceedings that would compel the company to abide by the rules.

One of the aspects of Facebook’s privacy protections that caught the Commissioner’s eye was the amount of personal data that is transmitted to or shared with the creators of third-party applications that Facebook users often agree to add to their profiles. Under the company’s rules, these third-party apps don’t have to provide much detail about what they plan to do with your personal data, and they collect a lot of data that isn’t really necessary, according to Privacy Commissioner Jennifer Stoddart.

This is something that many users have noted (and programmers as well), but in Canada that kind of personal data collection and retention isn’t just an irritation or curiosity, it’s potentially a breach of Canadian law. The law in question is the federal Personal Information Protection and Electronic Documents Act (or PIPEDA), which sets strict limits on what information can be collected, the amount of disclosure required, the purposes to which it can be put, and how long it can legally be retained. It is different in many key respects from U.S. privacy laws.

The Facebook investigation raised what the Commissioner’s office called “significant concerns around the sharing of users’ personal information with third-party developers creating Facebook applications such as games and quizzes.” The agency said that the company “lacks adequate safeguards to effectively restrict these outside developers from accessing profile information.”

The Commissioner’s report recommended a number of changes, including “technological measures to ensure that developers can only access the user information actually required to run a specific application” as well as taking steps to “prevent the disclosure of personal information of any of the user’s friends who are not themselves signing up for an application.” The investigation also found that Facebook has a policy of indefinitely keeping the personal information of people who have deactivated their accounts.

This is the second time that Canada has stepped in to advise a major Internet player of their neglect of privacy rules. Last year, Google came under fire from the Commissioner’s office over its Streetview” service, which hasn’t even launched in Canada yet. After reports emerged that cars belonging to Google had been seen filming in Toronto and other major cities, the federal agency released a statement calling on the company to change its methods to better protect people’s privacy.

In particular, the Commissioner said that revealing the faces of specific individuals without their consent was a breach of Canadian privacy laws, and so was revealing personal information such as car license plates. In the U.S., taking a photograph of someone in a public place without their consent is legal, but in Canada such photos are considered an invasion of privacy, unless they are taken for artistic or journalistic purposes, such as reporting on a news event.

Google responded by using automated technology to blur the faces of people in its Street View photo montages – a feature it is also rolling out in the U.S. and other jurisdictions as well.

Just as banks and credit-card companies routinely file lawsuits and press criminal charges against those who counterfeit money or use unauthorized credit cards, Microsoft has filed a lawsuit against three Canadians it accuses of the 21st-century equivalent: namely. “click fraud.” In the same way that cash — followed by checks and credit cards — were the currency that made capitalism function, the currency that drives value for giant Web businesses like Microsoft and Google is clicks.

According to Microsoft, its first-ever click fraud lawsuit was filed against a family from Vancouver — Eric Lam and Gordon Lam (who are believed to be brothers) and Melanie Suen (believed to be their mother) — because they engaged in repeated click-fraud attacks against online ads related to auto insurance and the multiplayer online game World of Warcraft. The company is asking for an injunction forcing the three to stop the behaviour, and is also asking the court to award it more than $750,000 in damages.

The crime itself isn’t nearly as straightforward as counterfeiting money or stealing credit cards. Click fraud involves rigging online advertising through the use of software scripts or other nefarious schemes such as “click farms,” and in a case like the one against the Lams, it involves jacking up the number of clicks on a competitor’s ads so that they have to pay more — since keyword-related search advertising such as that offered by Google and Microsoft is priced through an auction process. The more clicks, the more you pay for your ads.

Microsoft says in its suit that it had to pay some of its advertisers $1.5 million in ad credits in order to compensate them for the actions of the trio. The company is asking for an injunction as well as more than $750,000 in compensatory damages. Ironically, before it identified the Lams as the source of the click fraud, Microsoft says that it actually gave the family an advertising credit to compensate them for the click-fraud that was occurring.

“By engaging in a widespread scheme that generated invalid clicks on links to online ads that were displayed in response to search requests on Microsoft’s network, defendants disrupted the advertising campaigns of their competitors, obtained increased user traffic for their own ads at a much lower cost than they could have otherwise, and caused substantial damage to Microsoft,” the lawsuit alleges.

The software giant describes how it spent more than a year tracking the clicks on certain types of search-related keywords in markets such as auto insurance, and noticed that there were “a large number of exact match-type keywords being searched, and within a short period of time, the top sponsored site results were being clicked, which indicated that automated or ‘click farm-generated’ click fraud was occurring on the Microsoft network.” One of the difficult things about such a case is proving that the clicks were actually fraudulent, rather than just a coincidence.

Both Microsoft and Google (which has a dominant share of the market for online keyword-related advertising) have been on the other side of a click-fraud legal case in the past. In 2006, Google had to pay $90-million to settle a class-action suit launched by advertisers who claimed that they paid too much for their online advertising, while Microsoft has been sued for something very similar.