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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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June 15, 2009 5:05 PM

Microsoft files its first click fraud lawsuit

Posted by Sharon Chan

Microsoft is suing two brothers and their mother in Vancouver, B.C., for $750,000 after the company said the three engaged in online ad fraud to boost traffic to their auto insurance and World of Warcraft Web sites.

According to a civil case Microsoft filed Monday in the Western District of the U.S. District Court, Eric Lam, his brother Gordon Lam and their mother Melanie Suen used click fraud to increase their rankings on Microsoft's search engine Live Search.

Advertisers paid for placement on Microsoft's former search engine Live Search, now known as Bing. When a user entered a search term such as "auto insurance," advertisers bid for sponsored placement in the results. Each time a user clicks on an advertiser's link, the advertiser pays Microsoft. The cost per click ranges from five cents to hundreds of dollars depending on the desirability of the search term, according to court documents.

In click fraud, a person or computer program repeatedly clicks on a link without any interest in the Web site. It can be used to exhaust the ad budget of a competitor, and lower that site's placement in the rankings of the search results.

According to the court documents, the Lams and their mother engaged in click fraud in spring 2008 for advertisers who paid for placement for the search terms "auto insurance" and "WoW," short for the online game World of Warcraft. The Lams' Web site, WoWMine.com, sold game gold that could be traded in the online game.

I am trying to get in touch with the Lams to get their comments.

Update 6:35 p.m.: Gordon Lam declined to comment on the story by phone.

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