Spamford speaks

Spamford speaks
By Janet Kornblum
Staff Writer, CNET NEWS.COM

DRESHER, Pennsylvania--Call him Spamford.

That's the way he likes it. But mention that name, or his real one, Sanford Wallace, in the wrong place and you'll hear about it plenty.

Simply put, Wallace is not a popular man on the Internet. In fact, he may be one of the most reviled. Why?

Spam. And it ain't the soft pink stuff that riles those Netizens. Wallace fills email boxes with millions of unsolicited messages every day.

You know the stuff. It arrives in your email box uninvited and unasked for. Usually it's advertising some AMAZING, NEW product. Often you curse it, you curse whomever sent it. And then most of the time, you zap it.

But sometimes you don't. And that's what Wallace is banking on. The president and founder of Cyber Promotions aims to be the primo one-stop junk email source on the Net, and he's proud of it.

He claims that Cyber Promotions is one of the few companies to have made money on the Net. To prove it, he points to the cluster of somewhat sterile rooms that form his office in the middle of a tiny business park in Dresher, a sleepy Philadelphia suburb. Cyber Promotions moved there just about a year ago, and the company's growing so fast, Wallace is getting set to move to new offices and double his staff.

On this day, seven 20-somethings wearing shorts or jeans and T-shirts perch attentively on a couch and few chairs in Wallace's office. Wallace is only 28 himself, but thanks to his stature (he's a bear of a man with Popeye forearms, slightly nerdy glasses, and a shock of dark hair on his head), his loud, authoritative voice, and his position behind his computer-cluttered desk, he looks more like a civics teacher sharing a life-altering lesson.

The day's lesson is on customer service. The negative feedback on Cyber Promotions is fairly mild, according to the staff. More often than not, the businesses that send the junk email keep calling Cyber Promotions to thank them, and specifically Wallace, for being on the front, pushing the issues in the face of hostility.

"A lot of people, smaller companies applaud what you do," says April, who like the other staff members didn't want to give out her last name.

If this were a movie, this scene would feature the bold, yet sentimental soundtrack from Star Wars. The title: Spam Wars. The implication: At least in this office, Wallace is a hero fighting for downtrodden businesses that have ended up in the middle of spam warfare for their simple, yet innocent, capitalistic desire to advertise their products on the Internet. Wallace must protect them from the evil empire of old-school Netizens.

But go take a look at some of the postings on the Internet bulletin boards, especially those that focus on abuse, and the music does not sound so sweet. Wallace has a lot of enemies and they're not shy about expressing their hatred.

They want the spam to stop; they want revenge. Recently a hacker broke into the Cyber Promotions' site, stole some password files, and posted them with an open invitation to avenge the righteous. The passwords, in the end, turned out to be basically useless, but the incident served as yet another reminder of the lengths to which Wallace's detractors are willing to go.

There are people who dedicate hours, days, even months, fighting spam and Wallace, in particular. Some have vowed to track him and shut him down, no matter where he goes, like bounty hunters chasing the prized tiger. Phrases like the "Internet Death Penalty" are tossed around as the suggested punishment to be meted out to Wallace.

That kind of language (and that's the mild stuff) just might get to someone. But Wallace?

He likes it. No, he loves it. No, he thrives on it.

In Wallace's mind, no publicity is bad publicity and all the attention means he's doing something right. In one breath he compares himself to Madonna and Howard Stern, who have launched their careers using the awesome force of public outrage. In the next, he says how much he and Bill Gates have in common, how their ambition knows no limits.

Sure, spam makes him a pariah in some circles, but it makes him a well-known pariah. And, he would argue, a successful one. He's Spamford, he says proudly, appropriating the derogatory name used to label him. He's even registered it as a domain name. Like a kid getting away with throwing spitballs, he smiles because he knows that, if nothing else, people will remember him. And that means everything.

NEWS.COM interviewed Wallace in Cyber Promotions offices where we talked about the ethics of spamming, his enemies, and his life.

NEWS.COM: Have you ever eaten Spam?
Wallace: No, I'm afraid of it.

Are you offended by being called a "spammer"?
I'm not offended at all; I have nothing to be ashamed of. I feel that Cyber Promotions' activities are perfectly acceptable and we're just a reflection of the real world except it's online.

What do you mean?
Well in the real world when a woman gives birth to a baby, the post office sells her name to a baby food company. Then she becomes inundated by baby food ads in her mailbox. We're doing nothing different. It's a multibillion dollar industry called direct postal mail.

NEXT: Love thy enemy

Who needs spam?

There are people who argue that email is different because you're not bearing the brunt of the costs.
That's not true. People don't realize that we do bear the brunt of the cost. On the Internet, everybody pays for their own connection--that's the way the Internet works. For instance, America Online with 8 million members, they don't pay any other service provider to handle their million pieces of email that go out of their system everyday. So we don't either.

But we do pay for our own connection. Right now we maintain over five T1 lines. And that doesn't even include the bandwidth partnerships that we pay for every month. So we pay thousands and thousands of dollars just for bandwidth alone--and that doesn't even include the $50,000 that we put out for computer equipment this month.

But when I get real junk mail, I haven't had to pay anything for those letters. All I pay for is my rent for my home where my mailbox is.
You pay for garbage disposal? I bet you do. That's a cost. You see, people don't think that way. And on television, when you see ads during the Super Bowl, do you pay for electricity? It's a small cost I have to admit, but it's just the same way that it's a small cost to get email. Most people pay $20 a month and they can get all the email they want. That's part of the cost of being on the Internet. It's just like going to a nightclub: You pay $10 to go through the door and people are going to try to pick you up. Maybe you could say it's an infringement on your privacy, but it's part of the community that you're in.

The way that Cyber Promotions sees email is that it's an interactive community and you're not just living in a shell: People are going to try to communicate with you. And that's what we're doing--we're communicating.

Why would someone want your email? Why would someone want spam?
Well there's a very good reason that someone would want our email. There are people out there that actually want to know what's going on in the world, they'd like to get time-dated material. A lot of people want to know about new products; a lot of people want to know what kind of services are available; and a lot of people want to know what kind of opportunities are out there.

So some people don't want to be bothered, some people don't even want to have a telephone in their house. That's fine--you live like a hermit. That's fine, that's up to you, it's America. On the other hand there are people who like to be connected to the action and we're connecting the action.

I doubt I'm ever going to buy anything.
How do you know? You're a consumer. Do you buy soap every day? If an email came through to you and you were convinced of the credibility of the company that sent you that email and they had something that you need at a price that you think is attractive--why wouldn't you buy it?

The people on our mailing list, they've seen our mail for years. They know that we're not running around ripping people off. And when we give them a new product like our new Web Gold products for instance that teaches people how to make money selling Web pages and we endorse it and we give them a money-back guarantee, they're confident that Cyber Promotions is going to make good.

I get the sense that you enjoy the limelight.
You know I enjoy it. I enjoy it because I'm successful and I've not always been successful in my life. For the first time people understand that a crazy mind like this actually has the potential of making things change and to the positive too. We're not just hurting things--we're helping things because we're essentially accelerating the inevitable. That's what we're doing. Someone is going to do it--it's either going to be Sanford Wallace or it's going to be Joe Schmo out there. So I'd rather be the one to do it.

Does the bad publicity affect you?
Just like Madonna, just like Howard Stern--any publicity is positive publicity. And it's very simple: Anybody who sends 'junk mail' who sees us in the news--we are what they're looking for. So the media helps us because it actually helps people who are looking to send unsolicited or junk-type mail, it brings them to us. I'll be the first person to admit it.

NEXT: Love thy enemy

Love thy enemy

Does the fact that you're one of the most hated men on the Net bug you?
I have to admit that some people hate me, but I have to tell you something about hate. If sending an electronic advertisement through email warrants hate, then my answer to those people is "Get a life. Don't hate somebody for sending an advertisement through email." There are people out there that also like us. There are 8,000 people who pay us to like us.

I'm a nice guy, I'm a very nice person, I've been brought up very well. And the bottom line is I honestly believe that we're not doing anything wrong here and I don't think we're hurting anybody. I think we're just doing something that's very controversial. The truth of the matter is controversy does sell in this country. I'm in business to sell, I'm not in business to be the most popular person in the country.

But there are people who are gunning for you, who are going to follow your every move, track you down, and all your down-the-line providers.
There are people out there that say that we're wasting people's time and they're spending 24 hours a day trying to track us down. There are other people who send a thousand emails to us and say "stop wasting bandwidth." It's such hypocrisy!

If people care so much about what we're doing, how can they be offended that we're wasting their time? There's a very small, loud Internet community that just believes that the Internet is not the real world; that it's some sort of protected Holy Land--that things in the real world do not apply. If you live in America, you're going to see advertising. And we're sending advertisements. Just like every other medium--email is not protected from advertising.

People in the newsgroups say that you are deceiving your customers by telling them that people who get your emails want them--and they're saying that that's not true.
I notice that most of these flames are coming from the people in the Internet abuse newsgroup--the ones who are telling them how horrible we are. The people who are actually on our mailing lists, most of these people respond positively or don't respond at all. The newsgroup people just don't understand that there are people out there that want to get this.

Do you read all that stuff in the newsgroups?
Every day. I read every single posting in the Net abuse group. If anybody wants to talk to me about improving the Internet and improving the way solicited or unsolicited commercial email takes place on the Internet, then give me a real argument and I'll argue with you and I'll discuss it with you and I'll debate it with you. But if you're just going to insult me, then I have nothing to say back to you because you're just being a baby.

People say that you're really exploiting what the Internet was intended to be.
Who makes the decision what the Internet is supposed to be? I'd say the Internet is supposed to be a commercial free-for-all. What makes my opinion any less important than someone else's opinion, when I'm throwing hundreds of thousands of dollars into the economy and they're sitting there in their room saying "I don't think the Internet should be that way"? Who says that their opinion is any more important than mine?

Originally the Internet was used primarily for scientists, for military people, for governmental institutions. It was never perceived as an advertising medium. But actually thanks to companies like America Online, CNET, and others, advertising is becoming a major part of Internet life.

We're not putting up banner ads, but we're sending advertisements directly to people's email boxes. To many people we're breaking the rules of the old netiquette by doing that. But in America, there is no such thing as etiquette regarding unsolicited postal mail. And that's because most people know that it's coming and they accept that as a part of life. For the Internet, at least in the past, that would be considered the grossest violation of etiquette, but things are changing. Etiquette changes and it's changing right now.

NEXT: Spamming and the law

Spamming and the law

Well what about the legal issue? Are you worried that spam will be legislated against?
Absolutely not. See the thing is that I believe that there is enough of a resistance out there that this will be challenged. There's either going to be a law against what we're doing or a law against some of the things that email marketers are doing. It's going to be a debate that has to happen eventually.

And I will represent the emailers who believe that this is a free country and that we're allowed to do what we're doing as long as we have respect for people who don't want to get what we're sending them. Then there's no reason that we need a law. And technology can fix this. But I can promise you that there's enough people out there that have a loud enough mouth that there will definitely be a point when someone like Sanford Wallace is going to have to defend what we're doing in Congress. I'm prepared to do it.

So what's going to happen if this somehow is outlawed? Are you in this for the long haul or are you thinking you'll make your money and then go retire somewhere?
Well I think I've already proven that this is a long-haul business. There are a lot of people who have jumped in and have jumped right out. We've been doing it longer than anyone and we'll continue to do it for longer than anyone. And if it becomes illegal to send unsolicited emails, Cyber Promotions has many other ways to stay in business because we are no longer really in the business of sending unsolicited emails.

Most people don't even realize this, but we don't actually spam that much anymore. Most of the people on our mailing list are there by choice at this point or at least they're indifferent to it and they haven't opted-out. And most of the new people on our list have actually subscribed. The reason why we're still getting all this attention is because the whole world thinks that all we do is send unsolicited email and now with the ISPam Network, we're definitely going to be affiliated with unsolicited email, but on a different level. Now we're going to be more of the conduit and less of the actual individual who does it.

Faxing is outlawed, so why shouldn't email be outlawed? What's the difference?
What we're doing actually would not be illegal on the fax. The provider, the conduit of the advertisements are not the people who are responsible for unsolicited faxes. It's the actual advertisers. So just to let you know, Cyber Promotions wouldn't even be breaking the law if we were doing the same exact thing through a fax.

Fax and email are very different. There are humongous differences. Email has technology to help filter. People can reject mail. It's not the same as a fax where every single fax sent to that telephone number will be printed out on the person's paper. The second difference is that only people who print out email by choice are the ones who print it. Fax automatically prints it. The third big difference is that when somebody sends an unsolicited fax, it literally ties up the telephone line. There's no such thing as tying up a telephone line with email. You can get ten emails at once. But the big difference really is the fact that email can be filtered and technology can solve the problem. With faxes, you couldn't solve the problem with technology--there's no way to filter by fax number.

I understand your fax business prompted the antifax law.
That's a rumor. We weren't sending unsolicited faxes. We were calling people and asking them for their fax numbers. Everyone thinks that Sanford Wallace is responsible for the fax law--but no one even knew who I was in 1991.

Do you screen the people who want to advertise through you?
We're very, very selective now. We used to be much easier, but now it's gotten to the point where we literally can't send out as much as people want us to send out, so we have the opportunity to screen their material. And we're so strict about adult material. We used to have ads that said: "Call a party line." Not an adult sex line, but a party line: We won't even take that anymore. Even if it has the word "bikini" in it we might not take it. We want to make sure that everybody who is on our list is not offended by our material.

Also, there's a lot of scams out there. One of the reasons that we reproduce some of the National Fraud Information Center's postings is because we don't want people to get ripped off online. If we can police our own information, then we won't need the government to get involved.

What kind of clients are they? What are they selling?
Most of the people who we service are people who work out of their own home: People who don't have the opportunity to take advantage of more traditional advertising mechanisms that cost a lot of money. We work with mostly one-to-two-to-three person businesses and we also have some larger clients as well, but we don't cater to the larger clients as much at this time.

But I can tell you, for example, we have somebody who works out of his garage in Kansas City. That's one of our customers. We also have a company that sells software in New Jersey. It really ranges from one thing to the other.

And do you check out all these companies before you agree to advertise?
We don't sit there and have an investigative department here, but any time that we get any types of complaints of any kind we're the first people to act on it. Most of our clients are legitimate business people who are trying to make an honest living.

Can you tell me how much money you're making?
I could tell you what's public information and that is we're rated by Dunn & Bradstreet, so the numbers are public. Our first year our business grossed over $800,000. And that's last year as a corporation. This year our numbers are just going to make that look like a baby. So that's really the best number I can give you because otherwise my accountant might yell at me.

What I know is that my customers are happy and that when I look at my books at the end of the month, we're showing a profit when just about every other Internet Web-based company is showing a loss.

When America Online, CompuServe, and Prodigy are so afraid because they're all losing money every single quarter--Cyber Promotions, the bad boy on the Internet, has never lost money. And we've had to pay lawyers for five high-profile lawsuits, yet we still show a profit--and that's important. It's not all about money, but money talks very loud, especially in business.

And the message it's saying is that people are willing to spend money to send bulk commercial email period. And they're coming back for more. One more thing: 83%--actually the number is about 84% now--of our clients come back another time and either use the same service or buy a different service from us in the future. So we're keeping our customers happy.

NEXT: Spamford on Spamford

Spamming and the law

Well what about the legal issue? Are you worried that spam will be legislated against?
Absolutely not. See the thing is that I believe that there is enough of a resistance out there that this will be challenged. There's either going to be a law against what we're doing or a law against some of the things that email marketers are doing. It's going to be a debate that has to happen eventually.

And I will represent the emailers who believe that this is a free country and that we're allowed to do what we're doing as long as we have respect for people who don't want to get what we're sending them. Then there's no reason that we need a law. And technology can fix this. But I can promise you that there's enough people out there that have a loud enough mouth that there will definitely be a point when someone like Sanford Wallace is going to have to defend what we're doing in Congress. I'm prepared to do it.

So what's going to happen if this somehow is outlawed? Are you in this for the long haul or are you thinking you'll make your money and then go retire somewhere?
Well I think I've already proven that this is a long-haul business. There are a lot of people who have jumped in and have jumped right out. We've been doing it longer than anyone and we'll continue to do it for longer than anyone. And if it becomes illegal to send unsolicited emails, Cyber Promotions has many other ways to stay in business because we are no longer really in the business of sending unsolicited emails.

Most people don't even realize this, but we don't actually spam that much anymore. Most of the people on our mailing list are there by choice at this point or at least they're indifferent to it and they haven't opted-out. And most of the new people on our list have actually subscribed. The reason why we're still getting all this attention is because the whole world thinks that all we do is send unsolicited email and now with the ISPam Network, we're definitely going to be affiliated with unsolicited email, but on a different level. Now we're going to be more of the conduit and less of the actual individual who does it.

Faxing is outlawed, so why shouldn't email be outlawed? What's the difference?
What we're doing actually would not be illegal on the fax. The provider, the conduit of the advertisements are not the people who are responsible for unsolicited faxes. It's the actual advertisers. So just to let you know, Cyber Promotions wouldn't even be breaking the law if we were doing the same exact thing through a fax.

Fax and email are very different. There are humongous differences. Email has technology to help filter. People can reject mail. It's not the same as a fax where every single fax sent to that telephone number will be printed out on the person's paper. The second difference is that only people who print out email by choice are the ones who print it. Fax automatically prints it. The third big difference is that when somebody sends an unsolicited fax, it literally ties up the telephone line. There's no such thing as tying up a telephone line with email. You can get ten emails at once. But the big difference really is the fact that email can be filtered and technology can solve the problem. With faxes, you couldn't solve the problem with technology--there's no way to filter by fax number.

I understand your fax business prompted the antifax law.
That's a rumor. We weren't sending unsolicited faxes. We were calling people and asking them for their fax numbers. Everyone thinks that Sanford Wallace is responsible for the fax law--but no one even knew who I was in 1991.

Do you screen the people who want to advertise through you?
We're very, very selective now. We used to be much easier, but now it's gotten to the point where we literally can't send out as much as people want us to send out, so we have the opportunity to screen their material. And we're so strict about adult material. We used to have ads that said: "Call a party line." Not an adult sex line, but a party line: We won't even take that anymore. Even if it has the word "bikini" in it we might not take it. We want to make sure that everybody who is on our list is not offended by our material.

Also, there's a lot of scams out there. One of the reasons that we reproduce some of the National Fraud Information Center's postings is because we don't want people to get ripped off online. If we can police our own information, then we won't need the government to get involved.

What kind of clients are they? What are they selling?
Most of the people who we service are people who work out of their own home: People who don't have the opportunity to take advantage of more traditional advertising mechanisms that cost a lot of money. We work with mostly one-to-two-to-three person businesses and we also have some larger clients as well, but we don't cater to the larger clients as much at this time.

But I can tell you, for example, we have somebody who works out of his garage in Kansas City. That's one of our customers. We also have a company that sells software in New Jersey. It really ranges from one thing to the other.

And do you check out all these companies before you agree to advertise?
We don't sit there and have an investigative department here, but any time that we get any types of complaints of any kind we're the first people to act on it. Most of our clients are legitimate business people who are trying to make an honest living.

Can you tell me how much money you're making?
I could tell you what's public information and that is we're rated by Dunn & Bradstreet, so the numbers are public. Our first year our business grossed over $800,000. And that's last year as a corporation. This year our numbers are just going to make that look like a baby. So that's really the best number I can give you because otherwise my accountant might yell at me.

What I know is that my customers are happy and that when I look at my books at the end of the month, we're showing a profit when just about every other Internet Web-based company is showing a loss.

When America Online, CompuServe, and Prodigy are so afraid because they're all losing money every single quarter--Cyber Promotions, the bad boy on the Internet, has never lost money. And we've had to pay lawyers for five high-profile lawsuits, yet we still show a profit--and that's important. It's not all about money, but money talks very loud, especially in business.

And the message it's saying is that people are willing to spend money to send bulk commercial email period. And they're coming back for more. One more thing: 83%--actually the number is about 84% now--of our clients come back another time and either use the same service or buy a different service from us in the future. So we're keeping our customers happy.