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If you can't beat 'em, join 'em.

Yahoo and Click Forensics announced on Monday that they will be working together to fight click fraud.

Click fraud has historically pitted advertisers, who claim they are charged for fraudulent clicks on paid search ads, against search engines, which claim they manage to catch most of the click fraud out there.

Then there are companies like Click Forensics, which tracks the rates people, or automated software bots, are "clicking" on ads (and also recently got $10 million in funding). Click Forensics also releases regular reports on the perceived click fraud rate, which it says grew by 15 percent in 2007 over the industry average rate the year before. The average click fraud rate of pay-per-click ads on search engine content networks, like Google AdSense and the Yahoo Publisher Network, was 28.3 percent in the fourth quarter of last year, the most recent report says.

Google dismisses those figures, contending that Click Forensics' methodology is faulty.

Instead, Google says its click fraud rate is in the single digits, while Yahoo claims its rate is a subset of the 12 percent to 15 percent of the clicks on its network that it does not bill customers for.

Regardless of what the actual click fraud rate is, the problem is large enough to have prompted class action lawsuits, which Yahoo and Google have settled.

There have been calls for an independent third party to oversee the business, but advertisers don't want to give up their server data to search engines and vice versa.

The Yahoo-Click Forensics relationship seems like a step in that direction. And it gives Yahoo a way to distinguish itself from Google, a company that is ultra-secretive about most things, not just click fraud numbers.

Asked for comment, a Google spokesman gave this statement: "We provide numerous tools and support for third parties so that they can learn from our data and experience, and we work with them every day to improve advertiser ROI, including investigating potential cases of click fraud. We've been sharing information and working with third parties ever since we launched AdWords, and we're constantly improving additional tools for third-party support."

Yahoo first stepped ahead of the search engine pack with regard to click fraud when it named Reggie Davis as its first click fraud czar (officially "vice president of marketplace quality") a year ago this week.

Davis says that at the time he knew "we needed to be much more forthcoming with our percentages."

Neither he nor Tom Cuthbert, president of Click Forensics, will say exactly what information they will be sharing, other than that Click Forensics will provide feedback from advertisers to Yahoo. My understanding is that Click Forensics will serve as a sort of clearinghouse for the click behavioral data that advertisers collect, and that the information will somehow be shared with Yahoo.

Meanwhile, Yahoo won't be sharing information on exactly how its 2,700 filters operate to detect fraud with advertisers because they could then figure out how to circumvent the filters and game the system, Davis says.

Yahoo's goal is to try to come up with a better consensus click fraud rate than the widely disparate figures now being reported, and to make advertisers more confident in the system, he says.

Since Davis took over the click fraud hot seat, the number of claims by advertisers alleging they were charges for fraudulent clicks or poor quality clicks has dropped from 800 claims a month to fewer than 80 claims a month, Davis says.

"It's a heated issue," he says. "It's all about advertiser trust and their confidence in us to deal with these issues."

Click fraud is the search industry's dirty little secret--one that Google and Yahoo like to keep mum about. But a company that tracks the rates at which people, or bots, fraudulently click on paid search links just got a financial boost to work a little harder on its beat.

Austin, Texas-based Click Forensics said Tuesday that it raised $10 million in a second round of funding led by Sierra Ventures, which was joined by early investors Austin Ventures and Shasta Ventures. Sierra's managing director, Steven Williams, will join its board of directors.

The company plans to use the money to further develop its tools for tracking click fraud for online advertisers, publishers, and advertising networks. It publishes independent quarterly reports on click fraud occurrences on sites like Google, but Google representatives have said in the past that the company's data does not match its own.

In the last quarter, Click Forensics said that of all the clicks on paid search ads in the fourth quarter of 2007, an estimated 16.4 percent were bogus.

The overall industry average click fraud rate--which represents the number of clicks on online pay-per-click ads that are not legitimate--has jumped, according to a new report from search engine marketing firm Click Forensics.

The overall click fraud rate was 15.8 percent for the second quarter, up from 14.1 percent from a year ago and 14.8 percent from the previous quarter, Click Forensics said. The rate for pay-per-click ads appearing on search engine content networks, such as Google AdSense and the Yahoo Publisher Network, was 25.6 percent, up from 21.9 percent for the previous quarter.

The increase is due to a rise in the use of botnets, or networks of software robots that compromise people's computers and are remotely controlled or pre-programmed to do things like send e-mail spam, shut down Web sites by overwhelming them with requests or, in this case, automate the repetitive clicking on advertisements on Web sites, the report said. The clicks are fraudulent because they are not legitimate clicks from potential customers.

Traffic from botnets doubled from the first quarter to the second quarter, the report says. The FBI estimates that more than 1 million PCs in the U.S. have been compromised by botnets and are being used to conduct fraud.

"Click fraud has become the new spam and it's clearly a problem that is getting worse, not better," said Tom Cuthbert, chief executive of Click Forensics.

Click fraud is a problem in the industry because advertisers pay every time their ads are clicked on. It is done to either boost revenue to the Web site hosting the ad or to deplete the budget of the advertiser. Advertisers complain that they are credited for only a small fraction of the total of fraudulent clicks detected on their network.

Google claims that its click fraud rate is in the single digits, and Yahoo claims its rate is less than the 12 percent to 15 percent of the clicks on its network that it does not bill customers for. The Click Forensics figure measures all clicks detected on the advertiser side that are believed to be fraudulent, including clicks that Google or Yahoo may have either not charged for or credited advertisers for after the fact.

"Yahoo is also actively pursuing numerous new quality initiatives that provide advertisers with more control over and visibility into the quality of their traffic. We've recently launched new features and functionality--like quality-based pricing and enhanced geo-targeting tools--for advertisers and we plan to introduce additional controls like domain blocking in the coming months," Reggie Davis, vice president of marketplace quality, said in a statement. "While vigilance against click fraud is a top priority for Yahoo across all of our offerings, it's important to note that our Yahoo Publisher Network remains a limited beta program, which allows us to more closely monitor the quality of the publishers in our content network."

Google released a statement that said: "These estimates continue to count clicks Google does not charge to advertisers as fraudulent, so they are not actually click fraud estimates. Furthermore, their estimates have never reflected the invalid click rates we see at Google. It is also worth noting that in all of 2007, only two advertisers have contacted us regarding click fraud data from Click Forensics, and in both cases we found that the suspicious activity was not charged for in the first place."

Yahoo and Google have both settled class action lawsuits filed over click fraud.

The average click fraud rate--which represents the number of clicks on online pay-per-click ads that are not legitimate--is rising, according to a report from search engine marketing firm Click Forensics.

The average rose for the second quarter in a row, to 21.9 percent for search engine content networks like publisher networks that host ads served by Google and Yahoo, according to the Click Fraud Index. That was up from 19.2 percent for the previous quarter. The average for the overall industry was 14.8 percent for the first quarter, up from 14.2 percent in the previous quarter and 13.7 percent for the same period a year earlier.

But the report notes that the trend could be mirroring other types of online fraud. "Click fraud seems to be following a similar path as other online fraud schemes such as spam and phishing--the problem is growing as fraudsters fine-tune their methods," said Tom Cuthbert, president and chief executive of Click Forensics.

Google claims that its click fraud rate is in the single digits, and Yahoo claims its rate is a "subset" of the 12-15 percent rate for all problematic clicks for which advertisers are not billed. The Click Forensics figure measures all clicks detected on the advertiser side that are believed to be fraudulent, including clicks that Google or Yahoo may have either not charged for or credited advertisers for after the fact.

Click fraud occurs when search-related ads are clicked on for the purpose of boosting revenue to the Web site hosting the ad or depleting the budget of the advertiser. Advertisers complain that they are credited for only a small fraction of the total of fraudulent clicks detected on their network.