Google Faces The Slickest Click Fraud Yet

Click fraud, that perpetual bane of online advertisers, is usually hard to detect in the moment, but easy to spot after the fact. That's because, unlike real clicks, sham clicks performed by automatic click software or human fraudsters pump up an advertiser's pay-per-click fees but never generate sales.

But on Tuesday, Harvard Business School professor Ben Edelman revealed what he says is a new form of click fraud that accomplishes what online fraud watchdogs might have once thought impossible: a scam that not only simulates valid clicks on a Google ( GOOG - news - people ) ad sold to an advertiser, but seems to result in a real customer who spends money on the advertiser's site.

"This is a particularly insidious kind of click fraud," says Edelman. "It takes more effort to organize, but it gives the perpetrator the capacity to impose charges in a way that's much harder for the advertiser to notice."

In a real example dissected on his blog, Edelman described how that complex and stealthy click fraud scheme works.