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Has the spam dam really burst?

Spam, some say, has gotten so bad that it’s on the verge of killing e-mail. But if the Internet sky really is falling, why doesn’t someone do something?
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About 14 billion spam are sent each day now — two for every person on the planet, according to one study. Actually, two a day wouldn’t be so bad. In reality, many Net users say they are drowning in the stuff. The unrelenting deluge of unsolicited e-mail makes finding real e-mail from mom or the boss harder every day. So some are throwing up their virtual hands, and dropping old, beloved e-mail addresses in a vain attempt to run away from the bursting dam that is their Internet service provider. Spam, some say, has gotten so bad that it’s on the verge of killing e-mail. But if the Internet sky really is falling, why doesn’t someone do something?

Earlier this year, a line was crossed. In May, there was more spam than real e-mail flying around the Internet, according to spam-fighting firm MessageLabs Inc. And at just about that point, Uncle Sam — specifically, the Federal Trade Commission — decided to call an old-fashioned town meeting.

Just how emotional has the spam issue become? At Uncle Sam’s meeting, a fistfight almost broke out. And that was before a marketing company used the everyone-invited-to-the-table forum as an opportunity to serve spam fighter Allan Murphy with a subpoena. As anyone in the room would say, the issue of spam had reached the flash point.

Whatever measures the e-mail providers have been attempting to plug the dam, they just aren’t working. Despite all manner of new technology, legislative action, lawsuits, and outright bodily threats, the spam dam keeps springing leaks. And many fear the worst is still yet to come.

Pick your favorite staggering statistic to make the point — both consumers and corporations are crying out for help. Radicati Group says spam will cost companies $20.5 billion in 2003 and that by 2007 businesses will be forking over nearly 10 times that amount of money, or $198 billion, to battle spam. Jupiter Research says U.S. e-mail users received more than 140 billion pieces of spam in 2001 and an estimated 261 billion pieces in 2002 — an 86 percent increase. AOL says it blocks 2.3 billion spam e-mails every day. BellSouth says spam will soon add $3 to $5 to each customer’s monthly bill.

“E-mail is on the tipping point of becoming more trouble than it’s worth,” says Ray Everett-Church, chief privacy officer at ePrivacy Group.

Or is it?

Only a few months earlier than the FTC forum, the Pew Internet and American Life Project released its own e-mail and spam study, and it included this startling pronouncement: Spam isn’t that big a problem. A noisy, wired minority, the report said, has overexaggerated the spam jam-up. In fact, only 15 percent of workers surveyed say they have to deal with more than 50 e-mails a day. And nearly three-quarters said “only a little” of their work e-mail is spam.

No big deal?
Peter S. Fader, a marketing professor and spam expert at the Wharton School, thinks that far too much has been made of the spam issue — it’s only a minor annoyance to most Internet users, he said.

“People notice spam because of the negative novelty, but it’s not really that big a part of their life. But if you give people a choice and say, ‘We’ll take the spam away but your e-mail will come in more slowly,’ people would say, “Give me the spam,’ in a heartbeat,” he said. “It is just a phase we’re going through. Two years from now, we’ll look back on the spam thing and laugh.”

Anti-spam advocates, however, are hardly laughing. But the disconnect over how bad the problem is might partially explain why spam remains so bad for that noisy minority — perhaps the sky, and the Internet, really aren’t falling. Clearly, Everett-Church says, while nearly everyone with a stake in the issue claims the problem is dire and dramatic, corporate and legislative actions to resolve it have been slow and considered.

Among large Internet companies, who regularly cry the loudest about spam costs, action against spammers has been only incremental.

“The talk is at variance with the walk,” he said.

Why can't we fix the dam?
The chief obstacle to solving the spam problem is that there isn’t even yet consensus on what spam is. Many Net users would simply say it’s any e-mail they didn’t expect. But plenty of companies feel they can rightly contact customers with relevant information, and that consumers often want such a targeted service. To them, only misleading unsolicited e-mail is spam — that is, e-mail where the true sender is intentionally obscured, or an e-mail message that makes fraudulent offers.

Legitimate companies, this world view holds, should get at least one chance to e-mail people with an ad, the so-called “one bite” approach. And consumers who opt in for e-mail offers, well, they are fair game.

But while the debate takes place, the gray area becomes wider, and e-mail marketing companies with questionable practices have an easy time finding cover.

“The line between legitimate direct-mail marketing companies and spammers is very fine,” said Brian Czarny of Message Labs. “The spammers are good at presenting themselves as direct-marketing companies.”

The truth is, while spammers are on the run, they are still winning the race against corporations and government officials trying to shut them down. For every spammer put out of business by a lawsuit, probably hundreds of newbies are being trained in secretive “spam clubs” around the Internet. For every account shut down for illegal activity, thousands more open up. Technology such as spam filters or blacklisting techniques can only accomplish so much. In the end, the Internet still makes things much too easy for the bad guys to hide, too easy for them to pretend to be an old girlfriend or a co-worker and get you to click on their e-mail.

People do buy, don't complain 
And people do click. Few will admit it, but several interviews with spammers have revealed some products really do sell via unsolicited e-mail marketing. On a good day, a sophisticated spammer might have to send out 10 million e-mails to get 40 or 50 positive responses — but if they are requests for more information on a new mortgage, the spammers just made $10 for each response, or $400 to $500. Not a bad day’s work.

In fact, according to some abuse desk workers, about as many people buy from spam e-mails as complain about spam e-mails. A 2 million message mailing will generate 40 or 50 complaints, according to Jim Gregory, a former spam fighter at now-defunct ISP And without complaints, no spammer is ever shut down.

So for now, the fight about spam is limited to a relatively narrow cast of characters:

  • The anti-spam radicals, who chase after spammers with a quiver full of high-tech tools.
  • The king spammers, the 200 or so bulk e-mailers responsible for perhaps 90 percent of the worlds’ spam.
  • The small-time spammers, disciples of the king spammers, who are trying to get rich quick via a modem.

Legitimate marketing companies that really do believe in the power of e-mail advertising, and are willing to play by the rules — as soon as someone establishes some.

Big corporations and e-mail providers like Microsoft and America Online, which can’t help but suffer from schizophrenia on the spam issue. On the one hand, spammers annoy their customers and cost them money in bandwidth. On the other hand, none of them are willing to support legislative action that might someday limit their ability to make money by e-mailing their customers

Legislators, who see in spam a grass-roots issue that is starting to resonate with voters, and yet can’t quite figure out how U.S. laws can effectively regulate an international Internet issue.

In this special report, will chronicle some of the bitter electronic warfare that’s currently taking place in cyberspace among this cast of characters. The package will also examine the economics that prime the spam economy, revealing some beneficiaries of spam that might surprise you. It will introduce readers to the most important cast of characters in the spam world, a Top 10 list of sorts, who are ultimately behind most of the unsolicited e-mail that currently clogs in-boxes. It will uncover some of the games spammers play and the technology tricks they use to continually punch new holes in the dam. Finally, it will examine the legislation that’s been designed to plug the holes in that dam.