Click fraud is making a come back. Not that it never went away. False clicks on Google Ads, Yahoo ads, and MSN is proving to have at least 10% of its hits to be fraudulent. This according to Fair Isaac's, which is close to estimates by Click Forensics of San Antonio.
This isn't just your peeved competitor across the hallway or street. This is big business involving automated computer programs or teams of over seas scam artists who repeatedly click on ad links with no intention of buying anything.
In case, it isn't obvious, you must realize that because Google is the worlds largest Advertising agency, they really do not have any financial incentive to let this get out. They may not even care to stop the bad clicks.
This problem is pervasive amongst the top three engines, and one would think the bad news would be bad for business.
However, if they can't fix it, then they have to play in the world of "plausible deniability". Claiming that they take every action to keep clicks legitimate. Never admitting there is a problem..