February 2002 - Google introduces pay-per-click AdWords, program, which now generates the vast majority of Google revenues, forecast to top $10 billion in 2006. This “keyword” advertising differs from the pioneering pay-per-click advertising system developed by GoTo.com by not allowing advertisers to buy their way to the top of the listings. GoTo.com becomes Overture and Yahoo Inc. later acquires the Google rival.

2002-2003 - Click fraud problems emerges for Google and the company begins studying how to confront the problem. Google initially installs three types of filters. The filters detect and remove only the very basic invalid clicks. A newly published report on Google’s click fraud efforts criticizes Google for not doing more in this period to confront the mounting problem of invalid clicks.

March 2003 - Google AdSense begins. The program delivers Google ads that are relevant to what visitors see on Web site pages. In return, Google pays Web publishers who want to make additional revenue from advertising on their site using the program.

Spring 2003 - Google forms “Click Quality” team for detecting fraud and other forms of invalid clicks through a four-stage detection process, the new report by NYU professor Alexander Tuzhilin found.

Summer 2003 - January 2004. Three new filters remedy several problems that existed from the early days of Google’s advertising program, when the initial three filters were put in place, and Google’s invalid click detection efforts “significantly advance,” according to Tuzhilin’s report.

December 2004 - A global survey of 288 advertisers and ad agencies by Search Engine Marketing Professional Organization (SEMPO) finds that only 6 percent of advertisers believe click fraud is a problem. Only 25 percent of respondents say they track the issue. Forty-five percent say they are concerned, but not tracking the problem.

2005 - ”Several massive attacks were launched against the Google Network in 2005, and Google managed to detect and remove large volumes of invalid clicks at that time: one can clearly see major spikes on the charts plotting detected invalid clicks during this time period,” according to the new report. Industry awareness of the problem grows.

February 2005 - ”Lane’s Gifts and Collectibles LLC v. Yahoo Inc.” lawsuit filed by disgruntled advertising customer which names Yahoo, Google and a variety of lesser suppliers of pay per click advertising.

March 2005: Google reverses previous double-click policy of charging advertisers two times when customers, perhaps inadvertently, clicked twice on the same ad, according to Tuzhilin.

Late 2005 - Google’s “invalid click” problem is “under control,” Tuzhilin’s report on click fraud states. Fall 2005-present: Google studies new techniques for confronting what amounts to a form of “advertising spam,” aware that it is in an arms race with malicious actors.

March 2006 - Google announces plans to pay up to $90 million to settle the lawsuit filed by Lane’s Gifts & Collectibles. Up to $30 million of the settlement will go to plaintiff’s lawyers.

April 2006 - Judge Joe Griffin of the Arkansas Circuit Court of Miller County approves preliminary settlement between Google and the plaintiffs.

July 24, 2006 - Hearing scheduled in Judge Griffin’s court on objections to the settlement.

Sources: Dr. Alexander Tuzhilin’s July 2006 report on click fraud, Google Blog, John Battelle’s “The Search”, Eric Goldman’s Technology & Marketing Law Blog, ClickZ Network