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AOL to charge fee as way to cut spam

Posted by iMark - 2006-02-08

America Online will begin charging businesses to send commercial e-mail to its users in the first wide-scale use of authenticated e-mail to reduce spam. But some marketers affected by the plan, set to start in several weeks, call it e-mail taxation designed to create a new stream of revenue for AOL.
The certified e-mail system would require advertisers to pay $2 to $3 per 1,000 messages. The plan is optional, though AOL and its tech partner, Goodmail Systems, cannot guarantee that all non-certified e-mail with Web links and images will be delivered.

"This is all about protecting consumers from spam, phishing, viruses and fraud," says Richard Gingras, CEO of Goodmail.

If successful, the plan could entice other Internet service providers to follow. Yahoo plans to test Goodmail's system to certify e-mail for transactions such as financial statements and shipping confirmations.

Certified e-mail has become a hot topic in e-mail circles because many ISPs - out of security concerns - block messages with images and Web links. The AOL system would ensure such messages pass its stringent e-mail defenses and reach its 25.5 million subscribers worldwide. Gingras compares the system to certified postal mail.

"This will be painful for marketers in the beginning, but it is a positive step in forcing them to be more selective in who they e-mail," says Jupiter Research's David Daniels. "Many now just blast e-mail rather than target an audience."

Anyone can apply for the program. Goodmail determines if applicants are legitimate companies with pristine e-mail standards. AOL has final approval. E-mail of approved companies will come with digital tokens recognized by AOL security defenses. AOL subscribers will still be able to block mail from certified senders by adjusting anti-spam tools on their accounts, AOL spokesman Nicholas Graham says.

AOL says The New York Times and American Red Cross have signed up for the service. Spending on e-mail marketing is expected to jump 24%, to $1.1 billion, by 2010 from $885 million in 2005, Jupiter Research estimates.

Still, the revamped commercial e-mail system could have unintended consequences for some marketers and consumers.

"It's taxation of the good guys with cash, and it does nothing to help the good guys who can't afford the cost or to deter the bad guys who spam anyway," says Matt Blumberg, CEO of Return Path, an e-mail services company. "Baloney," says AOL's Graham, scoffing at suggestions the e-mail system amounts to taxation. "That's competitive chatter and sour grapes."

Consumers, meanwhile, may discover that some commercial e-mail they previously received, and wanted, no longer arrives if advertisers opt not to pay AOL, some e-mail marketers warn. E-mail users would need to retrieve them from a spam folder.

"This takes a system that works and shoves a stick in the flywheel of communication," says Jordan Ayan, CEO of SubscriberMail, an e-mail service provider for high-tech, media and sports companies.

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