Making money online through Adsense and other ad networks

A report was made by Dr. Alexander Tuzhilin, a professor of Information Systems at NYU in relation to the Lane's Gifts vs. Google settlement. Based on Mr. Tuzhilin's assessment, google's practices against click fraud are reasonable. It was a long 47 page report with very interesting content worth reading. The report is here.

The major points about Google's invalid click defense can be summarized into this.

"Google has built the following four 'lines of defense' for detecting invalid clicks: pre-filtering, online filtering, automated offline detection and manual offline detection, in that order. Google deploys different detection methods in each of these stages: the rule-based and anomaly-based approaches in the pre-filtering and the filtering stages, the combination of all the three approaches in the automated offline detection stage, and the anomaly-based approach in the offline manual inspection stage. This deployment of different methods in different stages gives Google an opportunity to detect invalid clicks using alternative techniques and thus increases their chances of detecting more invalid clicks in one of these stages, preferably proactively in the early stages." (p. 47)

I believe that the problem with click fraud cannot be solved 100%. There isn't any full proof algorithm that can cover all cases of click fraud. In fact google may have been to strict in some cases. I've read in digitalpoint that some webmasters were banned even without them clicking ads on their own sites.