- The Washington Times - Wednesday, July 16, 2003

Companies selling antispam products are posting soaring revenues as they try to keep up with an enormous increase in unsolicited e-mail.

Technology businesses across the globe are targeting spam, charging corporations and Internet users for their services and reaping a financial windfall in the process.

The market to block spam from entering corporate e-mail systems was worth nearly $120 million last year and will grow to $750 million by 2007, according to International Data Corp., a Framingham, Mass., technology-research group.

Spam is generally considered any commercial e-mail that is unsolicited and sent in bulk. Much of it is either deceptive, pornographic or both, and it costs businesses about $10 billion per year to deal with it, according to Ferris Research.

Recent estimates indicate that more than half of all e-mail sent is spam, and that the number of spam “attacks” has grown from about 650,000 per month in 2001 to more than 7 million per month this year. An attack occurs when a spammer sends the same e-mail in bulk. One attack often consists of millions of e-mails.

Brightmail, the world’s largest e-mail filtering company, announced Tuesday that it landed 120 new customers between April and June, and said its profits grew for the fourth straight quarter. The private company does not publish financial information, but is expected to bring in at least $30 million in revenue this year, more than twice its revenue from the previous year, according to International Data Corp.

Surfcontrol, a London company that creates Web and e-mail filters, earned $18.5 million between April and June, compared with $14.1 million a year ago.

Meanwhile, companies like Network Associates and Symantec, which have specialized in protecting e-mail users against viruses, are jumping into the business. Analysts predict that nearly all Internet-security companies will soon have units dedicated to fighting spam.

“Spam has always been around … . It wasn’t a high priority until recently,” said Chris Miller, a group-product manager with Symantec. “Over the last 18 months, we’ve seen this hockey-stick curve of spam and the severity of spam content.”

In addition, Internet-service providers have spent millions to block spam from reaching customers and have sought to recoup some money by selling their own antispam software.

Most of the software is designed to recognize spam and block it before it reaches customers. The software looks for key phrases common in spam, and in some cases blocks any e-mail sent from a suspect address.

Most products use a multilayered approach to block spam while ensuring legitimate e-mail gets through. Brightmail has set up 1 million inactive e-mail addresses, from which it collects spam and tests the effectiveness of its products.

The growth of the antispam industry underscores a widely held belief that spam cannot be stopped without the use of technology. Laws at the state level have not resulted in a single spammer’s arrest, and Congress is debating about a dozen bills in an effort to create the first federal antispam law.

But many antispam groups, including the Coalition Against Unsolicited Commercial E-mail, say spam-filtering companies have little incentive to make unsolicited e-mail disappear.

Microsoft, which sells antispam software as part of its MSN 8 Internet package, has repeatedly lobbied against certain types of antispam legislation at the federal and state levels, particularly measures calling for the creation of a “do not spam” registry similar to the “do not call” list that the Federal Trade Commission implemented last month.

Brightmail, Symantec and other groups with antispam products have been less vocal on the issue of legislation, but have generally opposed new antispam measures. Instead, the companies have pushed for better enforcement of existing fraud laws to catch deceptive spammers and a strengthened FTC prosecutorial staff.

They say their opposition to certain types of legislation does not indicate a lack of desire to stop spam. Rather, they say it is an acknowledgement that laws have been largely ineffective.

Some companies selling antispam products say they are doing so to protect their own customers.

Microsoft, for instance, said it blocks 2.4 billion pieces of spam sent to its customers per day, and has spent thousands of dollars and partnered with Brightmail to help stop it. The company said revenue from its MSN 8 software pales in comparison to the amount of money spent on blocking spam in-house.

Microsoft has about 8.7 million subscribers to its MSN Internet and Hotmail e-mail services.

“Spam is our number-one problem from a customer standpoint,” said Brian Doerr, manager of Microsoft’s Antispam Technology and Strategy Group. “It’s extra cost in the way of servers, bandwidth, processing … .”

Analysts said that while the antispam industry is growing, questions about the business remain. For starters, most people involved in stopping spam agree that the industry is fragmented, with many individuals and small companies competing.

Also, there is still much uncertainty over what legislation, if any, will be passed. If Congress mandates the creation of a “do not spam” list, some antispam companies will shift their efforts toward finding ways to keep the list secure and effective.

Furthermore, the behavior and nature of spam is constantly changing, and current spam-filtering techniques could prove inadequate.

“Whatever we do, spammers are always innovating around that,” said Mr. Miller of Symantec.

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