Even though their products scream to get your attention, the companies behind the estimated
6 billion spam e-mails sent each day worldwide shy from media scrutiny. No wonder. Despite general consumer and business hatred for unsolicited e-mail spam, it is a booming business.
Minneapolis-based e-mail security software company MessageLabs Inc. says spam now comprises about 30 percent of all e-mail messages. Its volume is expected to rise to 50 percent by July. Spam is expected to cost businesses worldwide $10 billion in bandwidth, personnel and IT expenses this year, according to a study by the European Union.
The Registry of Known Spam Operations, a list kept by the London spam-fighter Spamhaus Project (www.spamhaus.org), says 169 companies and individuals are responsible for more than 90 percent of all the current spam on the Internet.
Biz Ink contacted 20 spamming operations on the list, and none would comment for this story, including Lightspeed Marketing, TheAdStop.com, CyberISPWorld.com, bitpushers.com, Saverealbig.com, thedotnetwork.com, Monsterhut/Beaverhome and Shagmail.
“The problem is that every time a spammer has stuck his head up and said, ‘Yes, I’m a spammer and I’m proud,’ they have immediately gotten hammered,” says John Mozena, a board member of Internet-based anti-spam group Coalition Against Unsolicited Commercial Email (CAUCE).
Mozena says once individuals are identified as spammers, they are a target of the legal system and anti-spam vigilantes.
The last prominent spammer to talk to the news media was Alan Ralsky, who admitted using dozens of different dot-com domains to send millions of spam e-mails a day. He lives in a mini-mansion in the upscale Detroit suburb of West Bloomfield, Mich. The Detroit Free Press called it “the house that spam built” during an interview with Ralsky last November.
“I’ll never quit,” Ralsky told the paper. “I like what I do. This is the greatest business in the world.”
In a bizarre karmic twist, within days of that article, anti-spam activists posted Ralsky’s postal address on the Internet.
“They’ve signed me up for every advertising campaign and mailing list there is,” Ralsky told the paper in December. “These people are out of their minds. They are harassing me.”
The lure of a quick buck earned by spamming continues to charm more businesses. Surprisingly, in a technology hub like the Bay Area, the local companies making a living from spam are predominantly organizations fighting spam.
But there is money to be made in sending, not fighting junk e-mail. Analysts say about $2 billion will be spent on spam marketing in 2003. According to Gartner Inc. of Stamford, Conn., there are four distinct businesses involved in spam: the spammers, e-mail harvesters that create the databases spammers use, spamware software makers and unethical marketers who pay the spammers.
Spammers, like Ralsky, are the folks who hit the “send” button, physically sending e-mails to computer e-mail in-boxes.
Like the name suggests, e-mail harvesters are individuals or companies with software that scours the public domain of the Internet and automatically collects e-mail addresses from Web sites and Usenet news groups. Spammers either buy the software and collect e-mail addresses themselves or buy CD-ROMs of e-mail addresses from harvesters.
Spamware software makers create automated e-mail programs capable of sending 250 million e-mails an hour and often with the ability to disguise who sent the message.
Spamhaus has identified Lightspeed Marketing of Centerville, Va., as a maker of both spamware and e-mail harvesting products, labeling the company and its owner Dave Patton, “one of the slimier spammers in the stealth spamware business, selling products specifically designed to commit theft and fraud.”
Patton did not return repeated Biz Ink telephone calls.
Finally, there is what Gartner calls the “unethical marketer,” which has a product or service for sale and uses spam to market it.
The spam business is fairly straight forward.
“The spammer purchases e-mail harvesting software, purchases the spamware software then makes a deal with the unethical marketer,” says Gartner analyst Maurene Grey. “Either the unethical marketer will pay the spammer a set fee or, based on hit rates, the spammer will give back money to the marketer based on commission.”
She says only one-quarter of 1 percent of e-mail spam is successful, resulting in a sale.
“That is a tremendous amount of hits if, in fact, the spammers really are generating 250 million e-mails an hour,” she says.
Despite the success rate, CAUCE’s Mozena says spam is a bad business model.
“Part of it has to do with the fact people hate getting e-mail,” he says. “Legitimate companies don’t want to be painted with the same broad brush as porn sites and Nigerian scammers.”