From The NewsWeek:
Zhou Rengen knows the value of online advertising. His Web site, yyzs.net, is one of the largest online shopping sites for pharmaceutical products in China. Zhou needed to be at the top of everyone’s search list. In 2004 he signed a contract through a sales agent to register with Baidu, China’s leading search engine and a rival to American giants Yahoo and Google. Baidu listed Zhou’s site among search returns as a sponsored link, and in return Zhou paid a per-click fee to Baidu.
One day Zhou noticed that his payments to Baidu had risen precipitously. Using tracking software, he found that about 70 percent of visitors to his site came from one Web site: an online encyclopedia, Baidu Knows, sponsored by Baidu. Since there were no links on Baidu Knows to Zhou’s site, Zhou reasoned that the clicks were fraudulent”generated by software to inflate advertising charges. In September, Zhou filed a lawsuit accusing Baidu of click fraud. [Full Text]