Martin Fleischmann put his faith in online advertising. He used it to build his Atlanta company, MostChoice.com, which offers consumers rate quotes and other information on insurance and mortgages. Last year he paid Yahoo! Inc. (YHOO )and Google Inc. (GOOG ) a total of $2 million in advertising fees. The 40-year-old entrepreneur believed the celebrated promise of Internet marketing: You pay only when prospective customers click on your ads.
Now, Fleischmann’s faith has been shaken. Over the past three years, he has noticed a growing number of puzzling clicks coming from such places as Botswana, Mongolia, and Syria. This seemed strange, since MostChoice steers customers to insurance and mortgage brokers only in the U.S. Fleischmann, who has an economics degree from Yale University and an MBA from Wharton, has used specially designed software to discover that the MostChoice ads being clicked from distant shores had appeared not on pages of Google or Yahoo but on curious Web sites with names like insurance1472.com and insurance060.com. He smelled a swindle, and he calculates it has cost his business more than $100,000 since 2003.