Pick a company. Say, Laddernet. They offer to pay Yahoo up to $1.00 for every click on an ad for their website.
Yahoo runs the ad when people search for "electronic ladder system," and sometimes people click on it. Yahoo tells Laddernet, who turns around and writes a check to Yahoo. Everybody's happy.
But now Laddernet wants more clicks at that $1.00 per-click rate. Yahoo doesn't have any more people searching for "electronic ladder system," but they know that some other websites do. So they offer to give the ad to those other websites and split the dollar for every click. Everyone's still happy.
As this system scales, however, we get problems. Slimy Site joins this partner arrangement. They contract with adware providers to drive clicks through Yahoo to Laddernet. The adware providers, of course, don't actually generate meaningful clicks -- they fake it. But Slimy Site has a legitimate-looking site! When Yahoo comes out to check out these clicks, everything looks fine.
What can Yahoo do to prevent these fake clicks from destroying everything they've created?
I don't know. :o)
But I think similar problems have been addressed with credit cards and ATMs. And in one sense, it seems like the solution to this problem will be related to the problem of micro-payments.
Thinking... Thinking...
I love a fun problem.