Monday, October 27, 2003
The Economics of Spam Part II
Until late last year, Shiels was an e-mail spammer. The type demonized in every nook of American society. A prodigious Internet marketer, who from his Portland home sent up to 10 million unsolicited e-mail advertisements a day for other companies.
He said he made as much as $1,000 a week—and could have raked in a lot more if he hadn't quit the business in October, six months after he started. The path to spamming success requires expensive investments in software and the agility to adjust to the technological warfare between spammers and companies that try to block their messages. It also requires the stamina to withstand daily hate mail and even death threats.
Shiels decided a spamming career wasn't worth the personal cost.
Very interesting article. When last I spoke about the economics of spamming, I was assuming a response rate of 1 per 70,000 and even there, it showed that yea, you could make money at that rate. The article above talks about a response rate of 1 per 10,000—much higher response rate and gives more numbers than Paul Graham did in his article.
We're talking 10,000,000 emails per day (sent out in 18 hours) with four computers and two broadband connections; 150 emails per second (and contrary to what I wrote it would only take a month to send 250,000,000 emails via broadband, not the four months via T3s I had worked out erroneously). And the software to do this isn't cheap:
He spent about $10,000 on software to harvest e-mail addresses, to disguise his online identity and to send millions of messages a day.
Shiels would not reveal the companies that make the proprietary software, and he said they are difficult to track down. They only accepted payments through wire transfers, Shiels said.
“I could tell you the name right now, and you wouldn't be able to find them,” he said.
But's it's sophisticated software—programs to harvest addresses from websites, programs to scan for open relays and programs to send the actual email via those open relays. But Shiels was able to make $1,000 per week doing this so there is money to be made, which means this problem isn't goint to go away any time soon.