South-Western - Management  
Diverging Estimates of the Costs of Spam
Topic Electronic commerce
Key Words Internet, advertising, e-mail, productivity, spam
News Story

Unwanted commercial e-mail, or spam, has become the bane of the Internet because it is so cheap and easy to send that all sorts of companies and individuals often partake in "spamming". While the fractional costs are minor, the aggregate cost of spam is hitting the bottom line for many companies.

Spam costs Corporate America approximately $87 Billion/year. Purchases such as spam filters, lost productivity of workers and the creation of new corporate jobs to monitor spam usage, are all a large part of these costs.

Another segment of the marketplace, internet backbone carriers, such as MCI, also take a heavy financial hit as the result of spam. The biggest cost for these companies relates to the unpaid bills from the spammers the internet companies evict. MCI receives a half-million complaints a month that its network is being used to transmit spam, in violation of its policy. It has an "abuse desk" that investigates complaints and disconnects violators. According to MCI, if spammers know they are going to be kicked off they will not pay their internet bills.

Spam also can cause a number of false positives: legitimate e-mail messages blocked by spam filters. Not having access to legitimate e-mail can also be quite costly. Still yet another problem with spam is e-mail fraud known as "phishing", a means of stealing credit card numbers and social security numbers. All of the identified issues above, add up to an ever increasing drain on business and does impact the economy at large.

Questions
1.

How does spam drain the economy?

2.

What is your role in combating spam?

Source Saul Hansell, "Diverging Estimates of the Costs of Spam," New York Times, July 28, 2003.
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