The Economics of Spam
Whether you know him or not, you've probably received e-mail from Jeremy Jaynes. He was recently tried in Raleigh N.C., found guilty and the jury recommended a 9 year prison term. Jaynes was sending out 10 million e-mails a day! His business was very lucrative, generating up to $750,000 per month.
Jaynes was constantly tweaking and rotating products, but even so he would only get a response from perhaps 1 in 30,000! However, because e-mail is so cheap, he could still make big money. In a normal month, he would receive 10,000 to 17,000 credit card orders and make $40 each. That would usually gross over $500,000 per month after his $50,000 a month overhead.
Prosecutors believe Jaynes had a net worth of up to $24 million, and they described one of his homes as a mansion, though the e-mail came from a house described as average.
Jaynes got lists of e-mail addresses -- millions of them -- through a stolen database of America Online customers. He also illegally obtained e-mail addresses of users of the online auction site eBay.
Sending out spam is not illegal, but sending unsolicited e-mails with false return address information is. He provided bogus contact information and company names when registering for Web sites, making it almost impossible for recipients to track him down. He also falsified routing information within message headers and used software to generate phony domain names identifying the e-mail server used to send messages.
"He would do that to circumvent the spam filters," said Lisa Hicks-Thomas, section chief for the Virginia attorney general's computer crimes unit.
Many other spammers are putting trojans on people's computers and then using thousands of zombie computers to send out their spam, thus avoiding detection themselves.