…the small stones are rattling down the mountainside …
As I’ve said before, the combination of money to be made on-line with the lure of anonymity, is making the webscape turn, in the words of Wired magazine, from the Wild West into 1920s Chicago with Al Capone and Frank Nitti running the joint and launchin DDoS attacks on all those who dare to oppose their lucrative scam empires.
In 2004, botnets attacked dozens of online gambling sites. The
bookmakers were told to pay between $10,000 and $50,000 to get their
sites back online. Sometimes a DDoS assault aims not at extortion but
at taking out a business rival. Last summer, a 19-year-old Net
entrepreneur was sentenced to 30 months in prison for directing attacks
against competitors of his company, which sold athletic jerseys.
It’s simple – businesses and dewy-eyed n00bs pay for Google ads, lured by the promise of a well-heeled global audience. The bad guys pick out the juicy words, set up whack-a-mole sites and blogs, strew them with the keywords, and set up bots to go click-click-click and on through the night… and the cash rolls in, without any actual consumer actually seeing the “ad” or any sales taking place.
A week or so ago, at the EFF speech at USC, I asked if we could still afford the anonymity of the web. Because anonymity equals non-accountability. Read the harrowing tale of how a hackscammer in Russia outmuscled and drove into the ground even a strong security company, backed by some pretty well-equipped ISPs … including Six Apart, the company that (currently, at least) hosts this blog.
Now, the trail is starting to lead towards the suspiciously large amount of market capitalization attached to Google and Yahoo, etc., through the online advertising. Viz this, from The Economist:
the big internet firms seem to have been worryingly complacent.
Small-business owners, to whom click-fraud is most apparent, grumble
that Google and Yahoo! have tried to play down the scale of the
problem. Eric Schmidt, the boss of Google, caused a storm earlier this
year when he seemed to suggest at a conference that one solution to
click fraud would be to “let it happenâ€, since advertisers would not be
prepared to pay as much for bad clicks, so reducing commissions and
hence the incentive for fraud. He also joked that Google’s engineers
were having “great fun†trying to keep ahead of the fraudsters. And
Yahoo! concedes that click fraud has been a problem for years.
If that doesn’t send an arctic blast up the skirts of big online biz, then maybe this phrase from the Economist, which is the emerging conventional wisdom of all those investment bankers, CEOs and market analysts that have been waving the pom-pons for Google these last few years, will get their attention:
if the internet giants don’t deliver what the advertisers want,
advertisers will find other ways to market themselves. And if the
advertisements evaporate, so will that remarkable $150 billion
valuation.
That is a shot right directly across the bow. There had damn well better be alarm bells ringing and engineers sweating the night through on this issue. This meme is out there, and unless there are SIGNIFICANT changes to the whole online revenue structure, so as to plug up the obvious leaks, within about a year, the stories coming out of the biz mags are going to be of the “Emperor Has No Clothes” variety.
Can’t happen? Google is too big to fall?
In the summer of ’01, the best place to have your money was in Enron. The dot-com implosion had eaten up trillions, but this energy company was causing rolling blackouts in California and scarfing up billions. Within a year, the stock was drillbit category while the board of directors was getting ready to put on the dreaded orange jumpsuits and grab their ankles.
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