Google to Shutter Fake Internet Ads Agents In China

Google (GOOG) has intensified its battle against fraud in China’s online advertising market. According to ChinaTechNews, the search engine giant announced at its 2008 winter marketing forum in Beijing that it is getting ready to launch an initiative to shutter all of the unauthorized digital ads agents in China that resell illegally Google’s services. The practice, which continues to grow, involves fake co.’s and their agents who often claim to be able to place ads on Google’s search engine, but they will instead take a client’s money and not provide any services.

The scale of the problem has reached preoccupying levels. In 2007, notes ChinaTechNews, there were more than 300 Internet co.s’ in Nanjing (the second largest commercial center in the East China region, after Shanghai) and local media reported that over one-half of them claimed themselves to be agents of Google. During that period, Google only had 22 registered advertising agents across China and only one of them was located in Nanjing.

Currently, there are only a few dozen co.’s in China such as Chongqing Zhijia Co. and Guangzhou Tiantuo Co., who are Google’s own registered agents, there are still hundreds more who resell Google’s ads to customers with no formal reselling agreement. Clearly, the increase of such practice has hurt the development of Google’s keyword advertising business AdWords in China – pushing the Mountain View, Calif.-based co. to take the necessary steps and come up with solutions in order to prevent fraud from spreading further.

Liu Yun, vice president of Google in China, said the co. has developed a detailed plan to eliminate the continuation of the services from fake agencies that do not match Google’s model, and that the company “has decided on a clear schedule for regular purges within the advertising sector”. However, he noted that the whole process will be complicated and that the clean-up action can not be completed with an across-the-board method. Yun did not provide any details in terms of deadline for the initiative.