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Start-Up Aims to End Spam
From: Dave Farber <dave () farber net>
Date: Mon, 24 Mar 2003 10:14:07 -0500
I am at a loss to see how this is different from others like it. Djf Start-Up Aims to End Spam March 24, 2003 By JOHN MARKOFF SAN FRANCISCO, March 23 - Silicon Valley is continuing to hemorrhage thousands of jobs, but there are some here who say that the time has never been better for creating a start-up company. On Monday, Phil Goldman, whose career as a software designer has included stints at Apple, General Magic, WebTV and Microsoft, will introduce a service that he says will permanently end e-mail spam for consumers who are being driven to distraction by unsolicited pitches for diet schemes and offers of great wealth from Nigeria. Mr. Goldman, 38, who is self-financing his company, Mailblocks, said that the falling cost of new technologies and the slumping technology economy are making it relatively easy to enter new markets. "It's incredibly inexpensive to buy computers, and network bandwidth is essentially free and there is surplus equipment," he said. At the same time, innovation has been frozen because Silicon Valley's venture capitalists are largely sitting on the sidelines. "It's like a guy crawling in the desert who sees the oasis, but who can't quite get there," he said. Mailblocks, based in Los Altos, Calif., is entering the crowded e-mail market with the premise that consumers will pay a small annual fee for a solution to spam. The consumer e-mail market is currently dominated by Yahoo, Hotmail and America Online, which provide free basic services that are supported through advertising. There are also already dozens of commercial add-in products that try to recognize and block spam. Moreover, Internet service providers in recent months have begun to make new efforts to respond to growing consumer frustration with spam. In addition to legislative proposals before Congress and state legislatures, there are efforts under way within the direct marketing industry to try to deal with spam. And last week, the Internet Engineering Taskforce, a committee of technology experts that sets Internet standards, met in San Francisco to listen to proposals for technical solutions to spam. The Mailblocks antispam service is based on a so-called challenge-response mechanism to block bulk mail sent automatically to e-mail accounts. When a customer receives a new message from an unknown correspondent, the system will intercept the message and automatically return to the sender a digital image of a seven-digit number and a form to fill out. Once a human being views that number and types it into the form - demonstrating that he or she is a person and not an automated mass-mailing machine - the system will forward the e-mail to the intended recipient. Analysts who have seen the Mailblocks system are impressed by it, but some said it would be hard for a new entrant to become anything more than a niche player in the e-mail market. The International Data Corporation, a research house, estimates that there are about 700 million electronic mailboxes in the world and that the number will grow to 1.2 billion in 2005. "It's a really nice product, and it's pretty easy to use," said Jim Nail, a senior analyst at Forrester Research, a computer and communications industry research firm. "The question is how big a market. Do people want to pay anybody anything for these features?" Mr. Goldman said he was trying to imitate the strategy of Google, the dominant Web search engine company, which entered its market late but quickly became the leading service in its field because of its ability to provide more useful Web searches. Mailblocks will charge an annual fee of $9.95 for its personal e-mail service, which will give users 12 megabytes of mail storage and 6 megabytes of allowances for attachments. Charter members will receive two additional years of free service. Mr. Goldman plans for Mailblocks to offer related services in the future, like personalized domain names, calendaring, contact list management and other personal information functions. The idea of a challenge-response system to protect against bulk electronic mail has been familiar to the technology community for several years. A number of programmers, in fact, have developed their own home-brew challenge-response systems, and so have several small companies including Mailcircuit and Frontier. Mr. Goldman said he had come upon the idea independently in 2001, only to discover there were already many patents in the area. He contacted the inventor who held the first patent covering the idea and acquired that patent, as well as another in the same field. With the depressed job market, Mr. Goldman said it had been easy to find a small team of people who were passionate about building an easy-to-use consumer mail system. The technology trends that are currently driving costs down will make it possible for the new start-up to "be patient" during the period that the business is being built. Mailblocks has 15 employees, and Mr. Goldman said he estimated that he would need to add one employee for each million new e-mail customers the company attracts. http://www.nytimes.com/2003/03/24/technology/24PHIL.html?ex=1049519113&ei=1& en=d3c5628cbdbca57b HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales () nytimes com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help () nytimes com. 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