Microsoft's odd little lawsuit

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Microsoft (MSFT) is filing suit against three individuals for "click fraud." That's not three big companies, or three small companies -- just three people.

Click fraud is the practice of clicking on online ads to make the ads look successful as direct response media, even though the "clicker" has no interest in the products or services being marketed.

According toThe Wall Street Journal, "The suit seeks at least $750,000 in damages for an alleged scheme last year to drive up advertising costs for legitimate Microsoft advertisers while creating an advantage for the defendants' own businesses."

By clicking on these ads, the suit says that companies bidding for the same space on Microsoft sites and partner sites had to pay more to compete with the illicit advertisers.

Click fraud is believed to be pervasive across internet response ads. It drives up prices for Google (GOOG) and Yahoo! (YHOO) advertisers. It is sometimes hard to detect. By singling out three people, Microsoft plans to make an example of them the way the music industry did when it sued several individuals for illegally downloading music files.

The suit will actually scare the death out of a lot of bogus "clickers" and will probably help cut down on the practice. Who wants to by sued for $750,000 for clicking on ads all day?

Douglas A. McIntyre is an editor at 24/7 Wall St.

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