Spamonomics

Since last Wednesday, the torrent of junk e-mail coursing through the internet has been slowed dramatically, with 40 percent or more of it cut off at the source.

The source of all that spam? San Jose, California. That’s where a group of servers responsible for much of the world’s spam had been operating until they were severed from the internet last week.

The servers had controlled some of the world’s biggest botnets, the legions of hijacked personal computers that flood your inbox with ads for male-enhancement drugs.

The shutdown could be a major blow to spammers’ finances. Every day the botnets remain down means revenue lost. But how much revenue?

Nobody knows for sure, but a team of computer scientists at U.C. Berkeley and U.C. San Diego with an ingenious plan recently reported the first-ever hard numbers on the economics of spam.

After taking over part of an existing botnet, the Berkeley team waged its own spam campaign, sending out almost 350 million pieces of junk e-mail over 26 days. By the end of their trial, they had netted a whopping 28 sales. That’s about one response for every 12.5 million e-mails sent, a conversion rate of less than 0.00001 percent.

They estimate the yearly revenue of the botnet they had infiltrated at around $3.5 million (their full paper is available here).

To put that in perspective, spam costs U.S. companies $33 billion a year in lost productivity, according to one estimate, and $100 billion worldwide.

That means it seems likely the spam industry generates far less wealth than it destroys.

But the parasitic scam will remain with us as long as one in every 12 million or so of us buys the product they’ve been spammed for.

So what are the characteristics of the 28 good souls who decide to click on through and make a purchase?

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  1. James says:

    The types of people who actually ‘click through’ on spam are the same types who get suckered into 419s and other ‘Nigerian scams’.

    In a way, it’s digital Darwinism. If you get ripped off, perhaps you should’ve been aware of who you’re dealing with in the first place.

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  2. Robert says:

    I’m a small business (15 employees – we get about about 100K spam attempts a day) and my reports (from GFI Mail Essentials) don’t show any signifiant drop off in spam over the past 2 weeks. There was a drop on 11/12 but my spam is back to the normal levels for the most part.

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  3. frankenduf says:

    i’m 1 of the 28- what i wanna know is what all the other untold minions do for enhancement

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  4. RKReed says:

    The 28 good souls? They’re probably impotent, single, and of a mind that they’re just a replica watch and a good penny stock tip away from turning it all around.

    Also, as an aside, the whole “spam dropped 40-50% overnight” story was totally bogus. I work for a good-sized hosted email filter service, and we saw something like a 5-10% drop in traffic that day, and then a return to normal traffic the very next day. What the articles all failed to mention was that the day in question was Veteran’s Day – a holiday.

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  5. Derick says:

    I’m really tired of Darwin comparisons excusing bad behavior. That’s not how it works.

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  6. Caliphilosopher says:

    #1 –

    Darwinism? What you’re describing isn’t Darwinism at all. More like folk biology/sociology (at the most charitable).

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  7. Kevin H says:

    isn’t this a good target for government involvement. Create a international cyber crime type unit, that basically just gives Russia 1 billion dollars to hunt out spammers, saving us 20 billion? Some safeguards would be needed of course to make sure the spam actually gets taken down.

    Also, there is another way to cut down on costs, teach people to use anti-virus software and remove the botnet which allows these creeps to do this all nearly cost free.

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  8. Joe Smith says:

    As governments look for ways to revive the economy and boost productivity, a crack down on the dead weight losses from spam would be one good place to start.

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