Google 'key word' ads undercut eBay

With AdWords, Google has slowly transformed into an online marketplace and competing against eBay, the Web's most valuable company. Google was the No. 5 Internet brand in the United States in March, with 44.7 million users, according to Nielsen/NetRatings. EBay was No. 6, with 36.4 million.


Revenue at closely held, Mountain View, Calif.-based Google may reach $800 million this year, said Richard Fetyko, an analyst at Kaufman Bros. LP in New York. Profit may be as much as $200 million, he said.
EBay's revenue, which consists of fees and advertising sales, rose 62 percent to $1.2 billion in 2002. Net income almost tripled to $250 million.
EBay's stock has risen 86 percent in the past 12 months, giving the San Jose, Calif., company a market value of $34.3 billion -- compared with $16.1 billion for Amazon.com Inc. The Standard & Poor's 500 Index has risen 9.4 percent in the same period.
'Companies that have figured out how to make money on the Net are going to get bigger than any of us imagined,' said Tim Draper, managing director at venture capital firm Draper Fisher Jurvetson in Redwood City, Calif. "

Challenge Response Email Filtering- The Answer to the Spam Problem

The White House's recent announcement that the Exectutive Branch of the U.S. Government would be implementing a method of spam management known as "challenge/response" has certainly got our attention.

Unlike other anti-spam tools which rely on filtering and blocking emails, challenge/response is a system that relies on a confirmed response from an unrecognized sender in order to verify the email as legitimate. If the sender does not respond to the confirmation request, the email is not passed on to its intended recipient. Since most spam is generated by automatic software, the challenge/response system cuts down on a large portion of unwanted email. Here's how it works:

1) Robert signs up for a "challenge/response" email filtering program.

2) Sarah sends Robert an email.

3) Robert's challenge/response program puts Sarah's mail in a holding pattern and sends a confirmation email to Sarah asking her to prove that she is a real person by entering a code or replying to the email.

4) Sarah gets the email and confirms accordingly. Her original email (and all future ones) is then allowed to pass into Robert's email inbox.

5) All of Robert's friends, colleagues and other trusted senders can send Robert email once they reply to the challenge/response email action. Spamming bots, mass mailings with fake emails, and newsletters with a mail managing "reply to" address can not get into Robert's email.

Challenge/response may sound like a vaccine against all of the spammers who have taken over your emailbox and and cure for spam filters that may be improperly blocking your legitimate, important messages, but what about the newsletters that are sent by email bots that cannot reply? With challenge/response there is a solution for these situations as well. Challenge/response systems usually the ability for the user to white list newsletters and other email addresses that s/he automatically wants to let pass through without the challenge. (Hence our constant request/reminder to you readers to white list our WebAdvantage.net newsletter. Please don't forget!)

CHALLENGE/RESPONSE EMAIL FILTER PRODUCTS

spamarrest

Mailblocks

ChoiceMail

The Flip Side for Email Marketers

The challenge/response system really does not present a problem for the average person who may have to confirm a dozen or two challenge/response requests from the round of new emails for that day. But for an email newsletter publisher or marketer with a list of over 10,000 opt-in members, if even 10% of this list implements a challenge/response system, confirmation becomes virtually unmanageable and soon enough, their emails are never reaching their intended destination. That's really no better than having the email list blocked by a spam filtering system or blacklist!

This is all the more reason for email newsletter publishers and marketers to work on ongoing relations with their subscribers. Asking subscribers at the time of subscription sign-up and throughout the regular course of communications to automatically whitelist your emails is one of the very best ways to mitigate this problem.

Challenge/response firms are growing aware of this problem and working more and more with the email marketing community to come to a solution. Chip House, Director of Marketing at ExactTarget, a permission-based email marketing service provider, adds that "A number of challenge-response systems are on the market now, though the best ones allow the user to use an alternate email address for the email newsletters they want to receive. This feature allows legitimate marketers that only send to opt-in addresses to get through the challenge-response system, without having to manually respond to each challenge. Without this feature, users of this type of filtering may become frustrated with the fact that mail they want also gets trapped and often never makes it to them."

Problems Ahead

Besides the time it takes to manually reply to all of the challenge/response confirmation requests, this form of spam management poses some other problems.

* Dubious Confirmation Emails - How is the sender to know they're not being scammed? Would replying lead to simply sharing my address with another spammer or could my email be sent to a general public mailing list? These days, some folks won't even open any email from senders they don't recognize. Challenge/response companies are going to have to do an extremely good public relations job in order to get their names known and their emails as trusted as the original sender.

* Legalities - One challenge/response company, SpamArrest has been accused of a form of spamming because it places ads for its product in the challenge email. SpamArrest is also being sued by Hormel for trademark infringement for using the "Spam" name. Another challenge/response company, MailBlocks, filed suit against Earthlink in May 2003 for patent infringement after Earthlink implemented a similar system.

* Spam Blacklists & Other Spam Filter Companies - In theory challenge/response systems may sound like they'll work, but it's a greedy world out there and what's to stop a spam blacklist from blacklisting challenge/response emails because in theory, challenge/response companies are competitors of spam filtering and their system threatens the filter's very existence.

* Automated Sign-Ups - If a list owner uses an automated listbot program to manage its opt-in sign-ups, once new subscriber joins, the listbot will reply with an email asking the subscriber to click a link to confirm the subscription. But with a challenge/Response system, a challenge email is sent to the listbot before the user ever receives their confirmaton. Since the listbot isn't a person, it cannot know to reply to the challenge email and it does not. This means that the new subscription will never be activated because the confirmation never got sent out to the subscriber. It is lost in Internet limbo FOREVER!

* Ways to beat the system? - Spammers often "hijack" a person's name and email address, making it appear as though that person and not the spammer has sent the message. If a spammer sends an email using this method, will the challenge/response system still be able to detect the difference, or will it let the email pass through, as though the recipient is sending himself a message?

Some say that every rose has its thorn, and this is no different when it comes to the challenge/response system of email management. It is interesting to see a method that puts the onus on the sender, however, rather than the recipient.

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