Google has agreed to settle a class-action lawsuit brought against it over the issue of click fraud, which some industry experts believe could seriously threaten the company\u2019s main source of revenue: pay-per-click advertising. Google will pay as much as US$90 million to affected advertisers in attorneys\u2019 fees and credits as part of the settlement.The case was filed in an Arkansas court against Google and other search engine operators and providers of pay-per-click ads, such as Yahoo and America Online. The lead plaintiff is Lane\u2019s Gifts & Collectibles, which sells items such as dolls, figurines and teddy bears online, over the phone and by mail.At issue is click fraud, a practice in which someone clicks on a pay-per-click ad with a malicious intent. For example, a company official may click on competitors\u2019 ads, knowing that every time he does that, it costs his competitors money. Or the publisher of a website that runs pay-per-click ads may engage in the practice because the more the ads on his site are clicked on, the more commission money the publisher receives. The biggest losers from click fraud are the advertisers, because they are paying for clicks on ads that will not generate any business.Pay-per-click ads are commonly served up by search engines based on the topic of a user\u2019s query. These ads are the main source of revenue for Google and have become an important business for Yahoo.In the Lane\u2019s Gifts case, Google and the plaintiffs have reached an agreement, which would still need to be approved by the judge, wrote Nicole Wong, associate general counsel at Google, on the company\u2019s official blog on Wednesday.Details will become public when the proposed settlement is filed for the judge\u2019s consideration, but one key agreement is that Google has agreed to compensate advertisers that qualify for participation in the settlement. The company would pay out a maximum of US$90 million in the form of attorneys\u2019 fees and credits for purchasing ads on Google."This agreement covers all advertisers who claim to have been charged but not reimbursed for invalid clicks dating from 2002 when we launched our \u2018cost-per-click\u2019 advertising program through the date the settlement is approved by the judge," Wong wrote.Meanwhile, Yahoo declined to comment on Google\u2019s settlement but said it plans to continue fighting the lawsuit. "We stand firmly by our proprietary click protection system, and look forward to vigorously defending our position in this matter," a Yahoo spokeswoman said via e-mail.Google will account for the attorneys\u2019 fees as an expense, "most likely in the first quarter, once the amount is determined," while the credits will be noted as a revenue reduction in periods in which they are redeemed, Wong wrote.Google executives have said in the past that click fraud is a problem that the company takes seriously and aggressively polices, but that it hasn\u2019t had a material effect on the company\u2019s business.-Juan Carlos Perez, IDG News ServiceFor related news coverage, read Google Shifts Search Records Out of China, Google Leaks Internal Forecastand Google Plans \u2018Total Storage.\u2019Keep checking in at our CIO News Alerts page for updated news coverage.