Eulogy for the Spam King

But what is his legacy?

The spam didn't stop with Wallace. His company, Cyber Promotions, disconnected for months, had been refused connectivity by nearly every ISP. But he was never hit harder than while he was down. He consented to a nominal settlement of $2 million with EarthLink, a long-term litigant, and another recent settlement with Bigfoot, a relative latecomer to the spammer-suing party. America Online's Steve Case got laughs at a keynote address about the online service's "Ten most wanted" list of spammers.

AOL had been slow to anger in Wallace's early days when it time-charged customers (presumably before it realized that the main bottleneck in the Attention Economy was consumers' tolerance for solicitation). What really stopped Wallace was not legislation or even litigation, but the consensus by people who run the Internet that we can't afford to let spam get out of control--it could bury us all. Wallace's abdication represents a triumph of society where government failed--a victory for the Internet, albeit at tremendous cost.

But as much as the antispam community hated Wallace, he was a knowable enemy with definite strategies who reveled in his notoriety. We're left in the post-Spam King era bereft of a particular focus for our fight against junk email--unfortunately, however, not without the junk email itself.

The world's only career spammer has taken his silhouette off the firing range, but his legacy is a world angered by faceless snipers that lawyers cannot efficiently hunt down. The Federal Trade Commission has only just started prosecuting the countless scams that continue to clog most Netizens' email in-boxes. The conventional spam war against the large, slow-moving target of Cyber Promotions has been won, but the guerrillas now left spamming seem impossible to eradicate.

Whereas the average spammer seems unable to spell "business opportunity," Wallace is a highly articulate and intelligent strategist. The history of Cyber Promotions reads like a grotesque parody of mainstream marketing.

Textbook and fashionable business concepts such as educating buyers, building the market, "coopetition," the CEO as brand, and vertical integration can all be found in CNET's archives. After some tinkering with junk faxes, Wallace pioneered the "spam factory" in 1996, the Internet equivalent of the "dark satanic mills" of the Industrial Revolution. In its heyday, Cyber Promotions reached millions of people per day with ads from its customers, and with the now too-familiar claim: "Email marketing works."

Positioning spam as "direct marketing for the rest of us," Wallace deftly exploited the libertarian and egalitarian sentiments of many Internet users.

He chose his "target market" well: the AOL newbies with no memory of years of a virtually spam-free Internet. He sold the tools that have entrenched his practices: spamming software and lists of email addresses. He even used the headers of his email messages to promote filtering software, an offer that he acknowledged was "analogous to robbing a bank and then selling a security system."

His diplomatic coup de grace was convincing AGIS, a major ISP, to form a trade association of spam factories and administer a "do-not-spam-me" database. That predictably ended in tears.

The growth of spam has caused inestimable damage to consumer trust on the Internet, and traditional marketers, who failed to speak out and help stop spam, are now paying the opportunity cost. Privacy is now the No. 1 concern of users and the No. 1 reason cited by people hesitant to get online.

Spam offering CD-ROMs of millions of email addresses has raised concern about the direct mail practice of "selling names" without consent. (One such spam asks for the purchaser's email address, with an assurance that it will not be added to the list being sold.) Established companies not only don't spam, but they also live in fear that some clueless employee will make a mistake that will forever damage their brand. Opt-in email list managers now have to operate in an environment of suspicion and hostility.

Antispam legislation imposing fines of hundreds of dollars per spam is on the radar screen, raising the prospect that one night's spamming could rack up liabilities greater than the market capitalization of even the largest companies.

The cost of spam to Internet users, especially in wasted time, is enormous but difficult to calculate. The direct costs to the industry are more easily quantified: At the Federal Trade Commission's hearings on "unsolicited commercial email," an AOL attorney revealed that on a bad day 30 percent of the service's email was spam. Because servers and bandwidth must cope with peak demands, a fair slice of ISPs' hardware budgets can be attributed to spam. Beyond this are labor costs: an enormous amount of time spent by highly skilled employees to stop spam before it is noticed by the ISP's customers. Millions of volunteers have also joined in battle against spam by tracking down the senders and protesting.

Antispammers fought a just "war" against Wallace, and its wonderful end is that he was converted largely by technological resistance, rational dialogue, and legal processes. Certainly he endured some harassment, illegal or objectionable, but nobody broke his legs. The definition of a civilized society is a place where it's safe to be unpopular. Wallace was the most unpopular man on the Internet for more than a year, and he is walking away from that position with his health intact.

At a time when the media tend to portray the Internet as a haven for nuts and violent extremists, we can all take heart in the fact that our society has coped with the prolonged vexation of Cyber Promotions in a generally decent manner. Long live Sanford Wallace, ex-King of Spam.