Can Yahoo! Solve The Click Fraud Problem?

Writing by Pay Per Click Journal on Saturday, March 22, 2008 Comments Off

(Source) teaming up with Click Forensics in order to fight against click fraud may just prove to be a decision they will not regret. Advertisers will most likely appreciate their intention and, from that perspective, this partnership can be considered the second thing that Yahoo! has done right this week.

This is a good move on Yahoo!’s part. The first pay per click company to successfully reduce click fraud to manageable proportions will see a huge lift in their business overnight. Google doesn’t seem to be too serious about fighting click fraud. But Yahoo! partnering with one of the largest and most successful traffic quality businesses online does show a seriousness to address the issue head on. And if Yahoo! can successfully reduce click fraud and increase its profitability in that area then it certainly is possible that the company could double its cash flow within three years.

Understand, of course, that cash flow and profit are two different things. Reducing one’s debt can increase cash flow while reducing profit. So when Yahoo! says they will double their cash flow, it doesn’t mean that they will solve all of their financial problems. It just means that they will have more working cash with which to address those problems. Cash flow is very important for a business like Yahoo! because shareholders and potential investors look at that to determine the overall financial health of a business. And if Yahoo! can increase its cash flow it could attract more investors and better investors. That’s the first step to real profitability.

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