The key point is that click fraud will be the downfall of Google, not users' switching to a different search engine. I disagree. The beauty of Google's ad model is that it's extremely sensitive to market forces. This means that click fraud probably won't matter to most advertisers—it's just priced into the ads. If 25% of clicks are fraud, then ads will be approximately 25% cheaper than they would be if there was no click fraud.

A major media or government expose on click fraud could cause Google short term problems, but there are lots of advertisers who are addicted to Google's traffic. If they stop buying it, where will they go?

I'm sure there are some edge cases where click fraud is a serious problem for individual advertisers, but Google can likely address those more effectively because they should be easier to spot.

My second though is that Google has amazing resources available to combat click fraud. Who else is going to do a better job than they will? Nobody has at much at stake as they do.