Google Incorporated claims the company loses about $1 billion US a year to "click fraud" and similar scams on its ad service. Special software that can click on an ad repeatedly can be used to inflate a rival company's advertising costs or boost a site operator's own revenue gained from displaying the ads. Advertisers have been asking Google for a clearer picture of the reach and effectiveness of their ads. Google does not charge its advertisers for clicks it determines to be invalid, effectively cutting into the company's revenue.

"Our invalid clicks rate has remained in the range of less than 10 per cent of all clicks every quarter since we launched AdWords in 2002. Click fraud protection is something we take very seriously, and it requires a great deal of research and development to do effectively. [The] figures illustrate the significant level of proactive protection we provide, and how this has resulted in minimizing the actual impact of click fraud on advertisers," wrote Shuman Ghosemajumder, Google's business product manager for trust and safety, on the company's Inside AdWords blog late Thursday.

News source: http://www.cbc.ca/technology/story/2007/03/02/tech-googleclickfraud-20070302.html

I can't post the News Source url, here's the link :
http://www. cbc.ca/technology/story/2007/03/02/tech-googleclickfraud-20070302.html

Yea, it's amazing isn't it? But they make a lot more than that so its not gonna bring them down though...