E-Mail: The Free Market No Longer Free?

According to the New York Times, America Online and Yahoo are planning to exploit their positions as two of the world’s largest e-mail providers to make megabucks, a fraction of a penny at a time.

America Online and Yahoo, two of the world’s largest providers of e-mail accounts, are about to start using a system that gives preferential treatment to messages from companies that pay from 1/4 of a cent to a penny each to have them delivered. The senders must promise to contact only people who have agreed to receive their messages, or risk being blocked entirely.

The Internet companies say that this will help them identify legitimate mail and cut down on junk e-mail, identity-theft scams and other scourges that plague users of their services. Thy (sic) also stand to earn millions of dollars a year from the system if it is widely adopted.

AOL and Yahoo will still accept e-mail from senders who have not paid, but the paid messages will be given special treatment. On AOL, for example, they will go straight to users’ main mailboxes, and will not have to pass the gantlet of spam filters that could divert them to a junk-mail folder or strip them of images and Web links. As is the case now, mail arriving from addresses that users have added to their AOL address books will not be treated as spam.

If my address book is indicative of the entire Internet community, only 16 percent of people currently utilize these two services. It is easy to envision how AOL and Yahoo will attempt to use the volume of accounts they serve to control the marketplace. I don’t believe this will work for two reasons.

My snail mail box is filled six days a week with spam of the paper variety. Although the cost is considerably higher, the expense does not stop unsolicited advertising. AOL and Yahoo are not going to stop spam, but they may make millions of dollars from what could almost be described as marketplace extortion.

It would be rightfully described as extortion if users didn’t have any other options available, but they do. To begin, spam traps and filters are likely continue to improve, but even if they didn’t, paid e-mail won’t work as long as there are free options available. If AOL and Yahoo think that every small company, organization, or individual that owns a domain name and corresponding mail server is going to drop their service in order to jump on board with the major corporate domains, they are sadly mistaken.

When people find that they are not getting e-mail messages from loved ones, business partners, classmates, etc., they will drop Yahoo and AOL and use one of the many free services, even if it contains a bit more spam.

17 Comments
  1. Don’t bet on spam traps and filters improving all that much, if at all. Not the sort that you and I have access to, anyway. Most people seem to think that they have some sort of right, endowed by their Creator, to life, liberty, and a spam-free mailbox. Thus they aren’t usually willing to pay either their ISP or anyone else for it. Thus spam filter authors become discouraged, the tools stagnate, and the spammers — who are catching up rapidly — win.

  2. “Bobb,” that’s certainly what it looks like. Anybody who pays gets their message delivered right to the inbox, no spam filtering or anything. It sounds like this might actually INCREASE spam. And since the user is going to be more likely to trust anything in a paid email delivered to their inbox, it may well make them more vulnerable to fraud.

  3. Apparently, Michael, you don’t use SpamAssassin or GMail. SpamAssassin is the number 1 spam filtering tool in my “War on Spam” as it applies to my inbox. Its as good as GMails spam filter (and I have literally millions of emails, both good and bad, to train SpamAssassin with), if not better (white and black and grey lists, etc.)

  4. Hm, you should definitely check facts before posting. :)

    Not only do I use SpamAssassin, I speak to its developers on an irregular basis on various issues relating to spam. And about a year ago I wrote a WordPress plugin that screens comments using SpamAssassin. (It technically works, but email spam and blog spam being different creatures, it doesn’t catch much spam.)

    And I got my Gmail account long ago via a Google employee.

  5. Gmail is still free and they have pretty decent spam filtering applied. If you turn on the POP/SMTP abilities, then you don’t even see the ads they show on the webmail interface. Also, they’re one of the very few e-mail providers, paid or otherwise, that supports SSL encryption for both POP and SMTP. Another benefit of the SMTP with SSL-encryption is that it can get by the blocking of port 25, which is common with most ISPs.

  6. I recently moved my domains to my own VPS and while it took all last weekend to get everything moved over, it took me all of ten minutes to set up e-mail. That includes POP3, IMAP and SMTP, not to mention webmail, all of the above with SSL/TLS. I don’t care if port 25 is blocked; I have ports 587 and 465. :)

  7. I doubt that spam, with or without filters, will ever be eliminated. Businesses will always have the desire to advertise.

    Whatever filters we devise today will be circumvented by spammers tomorrow — it is the nature of things.

    This said, I expect (eventually) the most effective future solutions to come from open source solutions, and not from major corporate extortive remedies.

  8. Ultimately, even the people implementing the open source solutions are going to have to eat. I spend far less time on this issue than I used to because it’s not making me any money. If it were, I’d devote more time and resources to the problem.

  9. MH,

    If I had the time, I’d develop a major open database where people can voluntarily submit spam to create a major international blacklist.

    As opposed to SpamCop and similar services (which have often flagged my stuff as spam when it wasn’t), I’d run a user rated system so it is easier to unflag certain messages. People could set their own threshold on their own e-mail software to determine what level of spam would be thwarted.

    In the mean time, I’ll continue working with voluntary opt-in lists like http://libertarianlists.com/ and hope for the best.

  10. I read the article and came away with another concern. As a yahoo plus user (I point my domain name to yahoo) it appears that I risk a slowdown of mail delivery from both commercial senders and individuals. If yahoo thinks that I will continue to pay for a premium service that intentionally slows down my mail delivery they are sadly mistaken.

  11. SO,

    I’m not a user of such services, but I do have a fair amount of small business and small organization clients, and I suspect they feel exactly the same way you do.

    What happens when some local church sends a message to their Sunday School teachers that they will be starting an hour early next week, but 16% don’t get the message in time because the church didn’t pay off Yahoo and AOL?

  12. How is this Anti-FreeMarket? It seems to me that this is the free market in action. Charging extra to bypass spam filters? That doesn’t equate to charging your users extra to send an email.

    Don’t let your zealousness get the best of you. This is as much a free market solution as is the slew of competitive free email companies.

  13. I agree with “Iem,” this sounds like the free market to me (as the gov’t is taking no action). If it bothers people enough, I would assume people would stop using that email address and look elsewhere (another free market approach), however I dont forsee companies that pay to send email abusing this new system anyway.

  14. personally I use a paid “E”Mail ,
    plenty of capacities,no advertisments,little if any unwanted spam.and excellent virus/trojan/worm protections..
    well worth the $40 us. per year

    you get what you pay for…free isn’t allways free if you give up your privatcy..