Google CEO Eric Schmidt has recently said that the pay-per-click advertisement model is inherently self-correcting. Schmidt further seems to be easy with widely debated click fraud as he has found a perfect economic solution, ‘let it happen’.
eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks, in other words, the value of the ad declines, so over some amount of time, the system is in-fact, self-correcting. In fact, there is a perfect economic solution which is to let it happen.
However, Google charges advertisers even on bad clicks and the economic solution suggests that this payment would be regarded as cost of doing business with Google.