TELECOM Digest OnLine - Sorted: AOL Starts Charging for Email from Large Senders

AOL Starts Charging for Email from Large Senders

Jon Swartz (
Mon, 6 Feb 2006 13:52:16 -0600

AOL to charge fee as way to cut spam
By Jon Swartz, USA TODAY

SAN FRANCISCO - America Online will begin charging businesses to send
commercial e-mail to its users in the first wide-scale use of
authenticated e-mail to reduce spam. But some marketers affected by
the plan, set to start in several weeks, call it e-mail taxation
designed to create a new stream of revenue for AOL.

The certified e-mail system would require advertisers to pay $2 to $3
per 1,000 messages. The plan is optional, though AOL and its tech
partner, Goodmail Systems, cannot guarantee that all non-certified
e-mail with Web links and images will be delivered.

"This is all about protecting consumers from spam, phishing, viruses
and fraud," says Richard Gingras, CEO of Goodmail.

If successful, the plan could entice other Internet service providers
to follow. Yahoo plans to test Goodmail's system to certify e-mail for
transactions such as financial statements and shipping confirmations.

Certified e-mail has become a hot topic in e-mail circles because many
ISPs -- out of security concerns -- block messages with images and Web
links. The AOL system would ensure such messages pass its stringent
e-mail defenses and reach its 25.5 million subscribers worldwide.
Gingras compares the system to certified postal mail.

"This will be painful for marketers in the beginning, but it is a
positive step in forcing them to be more selective in who they
e-mail," says Jupiter Research's David Daniels. "Many now just blast
e-mail rather than target an audience."

Anyone can apply for the program. Goodmail determines if applicants
are legitimate companies with pristine e-mail standards. AOL has final
approval. E-mail of approved companies will come with digital tokens
recognized by AOL security defenses. AOL subscribers will still be
able to block mail from certified senders by adjusting anti-spam tools
on their accounts, AOL spokesman Nicholas Graham says.

AOL says The New York Times and American Red Cross have signed up for
the service. Spending on e-mail marketing is expected to jump 24%, to
$1.1 billion, by 2010 from $885 million in 2005, Jupiter Research

Still, the revamped commercial e-mail system could have unintended
consequences for some marketers and consumers.

"It's taxation of the good guys with cash, and it does nothing to help
the good guys who can't afford the cost or to deter the bad guys who
spam anyway," says Matt Blumberg, CEO of Return Path, an e-mail
services company. "Baloney," says AOL's Graham, scoffing at
suggestions the e-mail system amounts to taxation. "That's competitive
chatter and sour grapes."

Consumers, meanwhile, may discover that some commercial e-mail they
previously received, and wanted, no longer arrives if advertisers opt
not to pay AOL, some e-mail marketers warn. E-mail users would need to
retrieve them from a spam folder.

"This takes a system that works and shoves a stick in the flywheel of
communication," says Jordan Ayan, CEO of SubscriberMail, an e-mail
service provider for high-tech, media and sports companies.

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