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Yahoo! and Google are taking action to counter click fraud. Yahoo! is appointing a click-fraud Czar and Google is trialing changes to its AdWords scheme.

Click fraud occurs when someone deliberately hits adverts on a website to rack up charges for a rival company.

It is not clear how big the problem is, but many companies claim, and receive, refunds for dodgy clicks. Advertisers fear that bills are being wrongly inflated and the search engines hold all the cards - it is all but impossible to know whether clicks on your adverts are genuine potential sales leads or not.

In response, Yahoo! is promoting company attorney Reggie Davis to the postion of VP of marketplace quality, with the job of reducing click fraud and ensuring customers trust the results they get.

Davis told Reuters that between 12 and 15 per cent of Yahoo! clicks are rejected and not charged for. But not all of these are actually fraudulent clicks.

Google, meanwhile, is beta testing a new way for US companies to pay for adverts. "Pay-for-action" allows advertisers to specify an action - like signing up to a newsletter, entering a competition, or even making a purchase - and pay Google on the basis of that action rather than just paying for a click-through to a website.

The search giant said the change would give advertisers more choice. The new scheme is designed to complement its current cost-per-click and cost-per-impression pricing models. ®

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