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Spammers make a combined $200 million a year while costing society $20 billion

Dan Graziano
August 28th, 2012 at 7:55 AM

Spam emails are something Internet users just have to deal with. No matter how much companies spend to prevent spam, it doesn’t seem to make it any less prevalent. According to a report from Justin Rao of Microsoft (MSFT) and David Reiley of Google (GOOG), spammers and spam-advertised merchants cost society a whopping $20 billion while gaining a mere $200 million in combined revenue per year. The “externality ratio” of external costs to internal benefits for spam is around 100:1. That disparity could be even more substantial, however: others have estimated that spam cost society upwards of $50 billion.

Rao and Reiley note that even if only 1 out every 25,000 people who receive spam advertising were to buy something, it would still be profitable for spammers due to cheap operating costs. To prevent spam, the researchers say that we need to find a way to raise the cost of spam to the point where the spamming business is no longer profitable.

“We advocate supplementing current technological anti-spam efforts with lower-level economic interventions at key choke points in the spam supply chain, such as legal intervention in payment processing, or even spam-the-spammers tactics,” the pair wrote. “By raising spam merchants’ operating costs, such countermeasures could cause many campaigns no longer to be profitable at the current marginal price of $20-50 per million emails.”

[Via The Atlantic]

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