Start-Up Aims to End Spam

[Dave Farber <dave () farber net>]

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



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