Under fluorescent lights in a basement cubicle, Rajiv Kumar sells names of websites that pay people to click on internet ads. His price: 300 rupees ( 5).

"There's nothing wrong with any of this, " Kumar tells a prospective customer.

Clicking is easy, he says. Easy and a legal quagmire.

The practice known as click fraud exploits weaknesses in the pay-per-click system that has made Google a wonder of the web. Google, Yahoo and other providers of online search ads charge advertisers every time someone clicks on their links. By jacking up hits, people artificially inflate those bills.

Google says it's trying to fight such scams, but it stands to profit nonetheless. Unless the company or its customers spot bogus clicks, Google gets paid for them.

On 8 March, Google, without admitting or denying wrongdoing, agreed to pay $90m to settle its part of an industry-wide law suit alleging that search companies charged advertisers for clicks that weren't from real customers.

Click fraud strikes at the heart of Google, whose keyword-based ad network generates 99% of the company's revenue. Google has pushed beyond the $18bn world of online advertising, but some investors worry that dodgy ad hits and intensifying competition, particularly from Microsoft, will stunt the company's growth. Microsoft plans to launch a rival web ad system, code named Moonshot, next month.

Google chief executive Eric Schmidt declines to say how pervasive the scams are or how his company combats them. He says shareholders shouldn't worry: Google monitors every click and refunds advertisers for many phoney ones.

To its fans, the magic of Google is that it enables advertisers to reach motivated consumers directly.

Google a phrase and those blue ads are the result of Google AdWords, a proprietary programme that sets the ads' price through realtime auctions. Where ads appear on www. google. com, and their order in the sponsored links column on each results page, depends on advertisers' bids and how often surfers click on the links. If no-one clicks on the links, Google removes them.

In 2005, AdWords links on Google's own sites such as www. google. com generated 55% of the company's $6.1 bn revenue. The rest came from AdSense, a program that enables third-party websites to sign up online to display ads sold by Google. Advertisers pay Google by the click or by the number of times the ad is shown. Google passes most of the money along to the third-party sites.

Fraudsters try to profit from AdSense. By clicking on the ads on their own websites, scammers run up the bills that Google sends to advertisers . . . and in turn the amount of money Google passes on to the fraudsters' sites. How serious is the threat? That depends who you ask.

Michael Caruso, cofounder of San Franciscobased ClickFacts, a company that tries to help advertisers fight fraudsters, says scammers generate 40% of the clicks in some accounts. Jeffrey Herzog, whose iCrossing firm helps companies advertise on the web, puts the industry-wide figure at one in every 100 clicks.

A class action suit filed in February 2005 by online retailer Lane's Gifts & Collectibles alleged that Google wasn't doing enough to combat click fraud. Other search companies, including Yahoo, were also named in the suit, in which Lane's Gifts seeks class-action status. After Google announced its agreement to settle, Yahoo said it will fight on.

At Google's California headquarters, the 'Googleplex', top Google click cop Shuman Ghosemajumder says Google does everything it can to fight click fraud. "It's definitely in our long-term interests to deal with this issue seriously, " he says.

Ghosemajumder says Google is so good at monitoring the origin and patterns of clicks that rogue ones rarely reach advertisers' bills.

If advertisers complain, Google investigates dubious clicks. If hits are bogus, it refunds money to advertisers, he says.

Back in New Delhi, Kumar is recruiting clickers. The sign outside reads Data World.

The tile-floored office is little more than a walk-in closet.

White partitions separate Kumar's office from other cubicles in the basement.

Pick up the Times of India on any Sunday and you're likely to find half a dozen ads promising money for surfing the web. Data World ran one on 5 February looking for people to work from home or cybercafes. Those who turn up at Data World fill out forms with their names, ages, employers, telephone numbers and email addresses.

Kumar explains that websites will get in touch by email. He says he's recruited about 300 clickers during the past year or so. "We've been doing this for a year and a half and haven't heard of any problems."

Across town, Jagriti Bora tends another click network, Shipranet. Bora says Shipranet has recruited about 1,000 clickers. She says it's perfectly alright to click on ads. "There's nothing wrong with looking through a shop window even if you don't buy."

Some click artists have begun using software and computer viruses to unleash armies of automated clickers, or clickbots, says Merrick Furst, associate dean of the College of Computing at Georgia Institute of Technology.

The click artists are relentless, says David Hills, chief executive of Google competitor LookSmart, which was named in the Lane's Gifts suit.

Hills says he set out to eliminate bad clicks when he arrived in 2004. That sent LookSmart 's revenue plunging 46% to $41.4m in 2005.

"It's like the game Whac-aMole, " he says. "Every time you get rid of them, they try to get into the network someplace else."

To combat fraud, some internet advertising companies have moved from a costper-click system to a costper-action model. Californiabased ValueClick charges companies when surfers buy a product or sign up for a service. Google is testing a costper-action system. Some Google ads now carry a phone icon: click on it and Google asks for your phone number and automatically calls you and connects you to the advertiser.

The search-based ad industry is about to get more crowded. Microsoft has spent three years and undisclosed millions perfecting its new ad system and already has 3,500 US advertisers trying it out, says Tarek Najm, the engineer who leads the project."For anyone else, that's a launch, " he says.

Moonshot, officially known as AdCentre, will offer features not found on Google.

Advertisers will be able to target ads to specific demographics. Microsoft will deliver target markets by melding data it has on millions of users of its Hotmail service and its MSN website with demographic data such as postcodes. Microsoft says it won't mine data that could be used to identify specific users.

For now, the future of Google and its stock depends on the click of a mouse. Each click brings in money that Google needs to keep growing. The question for advertisers and investors is how many are for real? Google won't say.

In the meantime, the likes of Bora and Kumar tend their click networks far from the Googleplex. A young, unshaven man carrying a motorcycle helmet arrives at Bora's tiny second-floor office."Will there be regular work?" he asks. "You 'll have mail, " Bora says. A new clicker is born.