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Economics of SPAM
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Author Economics of SPAM
rffrydr
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Joined: 30 Oct 2005
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PostPosted: Sat Dec 27, 2008 5:11 pm    Post subject: Economics of SPAM Reply with quote

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Spam, spam, spam

Published: December 26 2008 18:15 | Last updated: December 26 2008 18:15

Few people are genuinely interested in “male enhancement”. The group that might actually buy such a product in response to an unsolicited e-mail is even smaller. So why on earth is there so much spam?

The reason is that spammers have to deluge inboxes to get a hit. Researchers at the International Computer Science Institute at Berkeley and the University of California San Diego took control of a small part of a spamming network earlier this year. In 26 days they sent 348m e-mails, producing 11,000 visits to a fake pharmaceuticals site, but just 28 “conversions”, or attempted purchases worth about $100 each. For those hawking pills, that suggests revenues of about $3.5m a year.

Given that virtually all spam is sent by 10-15 spamming networks globally, that does not suggest a great deal of cash for an activity that creates more than 80 per cent of the world’s e-mail traffic. But spammers do profit from renting out use of their networks to advertisers – including fraudsters wanting to “pump and dump” penny stocks. Meanwhile, companies with the skills to identify and cut out junk enjoy a lucrative market of their own. The e-mail security market had sales of $1.2bn this year, according to Gartner – mail filtering typically costs between $3 and $20 per user annually.

The authorities occasionally catch a spammer, but the serious operations are usually safely ensconced in less vigilant locales. The problem now is that unwitting spammers are everywhere. Their networks are created by “bots”, computer viruses that infect PCs and set them to spamming, with a typical network comprising upwards of 200,000 infected machines. Internet service providers could try to cut spammers off – infected machines can be spotted by their frantic e-mailing. But the time and cost of explaining to all those customers why they must clean their machines is a powerful disincentive. Spam is here to stay.

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