The true cost of spam

I am convinced that we need a new type of post office - an electronic post office. This is the case because spam is killing one of the most cost-effective productivity tools ever invented: e-mail.

At its essence, e-mail is a store-and-forward computer program. Someone deposits data in a file; someone else withdraws the same data from a file. In 1975, the U.S. postmaster general and the envelope manufacturers asked me to analyze how electronic mail would affect the post office. My answer: first-class mail would stay at about 100 billion pieces per year, but wouldn't grow. At the time, the amount of e-mail being sent in the U.S. was about 100 million messages per year - one-tenth of 1% of first-class mail. There weren't even PCs until 1981, but large companies were sending e-mail off their mainframes using a software program called PROFS. By 1997, e-mail had surpassed first-class mail. E-mail essentially doubled each year from 1975 to 1980 and has been growing 50% per year since then; first-class mail has been flat for the last 30 years.

In the early days, when a corporation would run e-mail off its mainframe, the cost was about $2 per message. As we learned to put e-mail on less-expensive servers, the cost went to about 5 cents per message. Now e-mail is considered free - but it's not.

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I am convinced that we need a new type of post office - an electronic post office. This is the case because spam is killing one of the most cost-effective productivity tools ever invented: e-mail.

At its essence, e-mail is a store-and-forward computer program. Someone deposits data in a file; someone else withdraws the same data from a file. In 1975, the U.S. postmaster general and the envelope manufacturers asked me to analyze how electronic mail would affect the post office. My answer: first-class mail would stay at about 100 billion pieces per year, but wouldn't grow. At the time, the amount of e-mail being sent in the U.S. was about 100 million messages per year - one-tenth of 1% of first-class mail. There weren't even PCs until 1981, but large companies were sending e-mail off their mainframes using a software program called PROFS. By 1997, e-mail had surpassed first-class mail. E-mail essentially doubled each year from 1975 to 1980 and has been growing 50% per year since then; first-class mail has been flat for the last 30 years.

In the early days, when a corporation would run e-mail off its mainframe, the cost was about $2 per message. As we learned to put e-mail on less-expensive servers, the cost went to about 5 cents per message. Now e-mail is considered free - but it's not.

If someone wants to send a piece of unsolicited mail via the postal service, they have to pay about $1 for printing, postage and handling. This out-of-pocket cost dissuades many people who are unsure about trying to sell you something from trying to do so. It's a form of self-regulation. But the cost of e-mailing to a person is zero. That is why IDC predicts that there will be 60 billion e-mail messages sent per day by 2006. That would be the equivalent of 10 e-mails per day from every man, woman and child in the world. If you assume that 80% of those messages are going to be from people in the U.S. (about 4.8% of the world's population), this means about 200 messages per day per person. Going away for 10 days? Good luck plowing through those 2,000 messages when you return.

What I propose is that all e-mail, internal or external, carries a 1 cent price tag - paid to the new U.S. Internet Post Office. So for example, a 50,000-person company in which each worker sends 10 messages per day, 240 business days per year, would pay $1.2 million per year.

Would corporations be willing to pay a penny per e-mail? In a heartbeat! Look what it's costing them now. If the average employee spends 10 minutes per day deleting junk, 240 business days per year, then this translates to 40 hours per year. Assume that time is worth $25 per hour, and you have a real cost of $1,000 per employee for a 50,000-person company - or $50 million per year.

Years ago, Charles Wang, former CEO of Computer Associates, turned off the corporate e-mail system from 10 a.m. to 3 p.m. every day because he believed that e-mail was getting in the way of management. He had the beginnings of the right idea. But now it's not the internal e-mail that is the problem - it's the external. In electrical terms, the signal/noise ratio has begun to turn adverse - too much noise, too little signal.