Microsoft says it has identified a new form of click fraud, dubbed "click laundering," in which alleged fraudsters are using sophisticated techniques to mask the source of traffic to Internet ads -- making it look as if they're coming from interested web surfers when they're actually manufactured artificially behind the scenes.

As part of the initiative, the company filed two lawsuits in U.S. District Court in Seattle against online publishers accused of abusing Microsoft's own online advertising systems. But the Redmond company, a major underdog to Google in online search and advertising, also is attempting to deliver a bigger message to the industry.

"We want online advertisers to know that when they advertise on our networks they will get what they pay for, and we will stand behind them," said Brad Smith, Microsoft's general counsel, during a briefing with reporters today. He added later, "They're paying for legitimate clicks from human beings, using the Internet."

The lawsuits were filed against Eric Ralls of Dallas, president of a company called RedOrbit Inc. (PDF); and a series of John Does whom Microsoft hopes to identify as part of the legal process of discovery (PDF). Ralls denies the charges, according to a report by SeattlePI.com, which reached him via phone after the cases were filed.

Microsoft says click laundering goes beyond the basic and more easily detected forms of click fraud, such as clicking repeatedly on ad. One form of click laundering involves herding traffic to online advertisements from a variety of online sites -- often "parked" domains that don't have any legitimate content -- and then change the underlying code to make it look as if the traffic resulted from natural referrals from the publisher's own site.

"Over time, click-laundering operations have grown in scale and sophistication and now constitute a major engine of click-fraud," Microsoft says in the suits.

Separately, Microsoft said it settled for undisclosed terms a case the company previously filed against Eric Lam, who was accused of click fraud in a case involving online auto insurance and World of Warcraft-related advertisement.

Click fraud is a particularly sensitive issue for Google, which generates the vast majority of its revenue through advertising. Experts brought by Microsoft to the briefing with reporters included Harvard Business School assistant professor Ben Edelman, who has spotlighted instances of click fraud involving advertisements placed on Google's systems. Edelman gave credit to Microsoft for bringing the cases and highlighting the click laundering issue.

Steve Sullivan of the Interactive Advertising Bureau, participating in the Microsoft event via phone, said the IAB would be one forum where the major industry players could address the click laundering issue.