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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

November 11, 2008 at 2:29 PM

No wonder: Study finds a Viagra spammer may gross $3 million a year

If you wonder why the flow of spam e-mail never ends, it’s because there’s money to be made.

A “Spamalytics” study by researchers at the universities of California at Berkeley and San Diego duplicated the Storm botnet worm, replicating the system and even fake pharmaceutical storefronts. They found that spammers make money if just one person out of 25 million recipients makes a purchase.

WebProNews summarized the study nicely:

Over 26 days, 350 million e-mail messages went out, resulting in 28 sales, for a conversion rate of 0.00001%. All but one sale were for male-enhancement products, with duped (and apparently insecure) respondents averaging $100 worth of fake product. Interposing only 1.5 percent of the Storm network, that would push daily revenue to between $7,000 and $9,500, or $3.5 million annually.

The researchers determined, though, because of the cost of running such a large spam operation, this would not be enough revenue to split between affiliates, meaning it’s a good possibility the teams behind pharmaceutical sites are likely the same teams creating spambots. Though the team wouldn’t estimate the cost of doing this type of thing in-house, they did think it was roughly the cost of “two or three good programmers.”

So the good news is that high entry costs and narrow margins limit the appeal of the spam business.

Another tidbit WebPro called out: Hotmail did the best job blocking the spam, compared with other major Web mail services, putting the testers’ fake spam on virtual lockdown. None of the test spam got past Hotmail. Gmail let the most through, followed by Yahoo Mail.

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