In its second-largest acquisition, Amazon buys the company for $970 million.
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Many companies have cleaned up their act and no longer are in “batch-and-blast mode” like they were in the ‘90s, Cahill adds. “All those businesses have made investments and are successfully getting delivered today. So why all of a sudden do they have to pay a tax to achieve what they already do?”
In addition, some retailers are concerned about how the certified e-mail service might affect their routine communications with customers. “We send customers things like order status notifications; your order has been received, shipped, etc. Does this mean for every single e-mail we send to AOL subscribers we’ll need to pay to certify that the customer receives it?” CD Universe’s Salai says.
Joining the chorus of voices against the move, civil liberties organization Electronic Frontier Foundation has pieced together an unusual collection of not-for-profit organizations and others-including Gun Owners of America, MoveOn.org, Civic Action and the Association of Cancer Online Resources-“to fight AOL’s ‘E-mail Tax,’” according to a statement by the group. It has launched a campaign against the certified e-mail service.
“AOL’s proposed pay-to-send system is the first step down the slippery slope toward dividing the Internet into two classes of users-those who get preferential treatment and those who are left behind,” the group’s statement says.
And the harshest critics are standing their ground. When AOL announced last month that it had changed its plans to offer discounts to not-for-profit organizations and instead provide certified e-mail to such organizations for free, it did not waylay protestors’ concerns.
At the same time, some critics voiced concerns over Goodmail’s rejection of a majority of applicants for its CertifiedEmail service. The company reports that more than 75% of applicants are turned down. The number is so high because most companies do not meet Goodmail’s rigorous standards, says Richard Gingras, CEO and co-founder of Goodmail Systems.
“Most applicants simply do not have the necessary pristine complaint histories we require,” Gingras says. “Additionally, the information these companies provide often does not match what we find during our research.”
There is nothing to fear...
Many in the industry do not subscribe to the fears of the Electronic Frontier Foundation’s coalition and others. The service is optional-a tax is not.
“As a legitimate retailer, the cost of such a program is negligible,” says Wily of Sewell Direct. “Even assuming the cost is as high as 1 cent per e-mail, any retailer who cannot justify a $1,000 expense for reaching 100,000 opt-in customers probably has a message that would be considered spam by a recipient and hence should never be sent anyway. As a result, additional cost for certification added to an e-mail campaign will be offset by an increased open rate-ultimately leading to more sales.”
The e-mail medium has a reputation problem; certified e-mail can help solve it, contends Arial Software president and CEO Mike Adams, who two years ago launched an anti-spam campaign, www.SpamDontBuyIt.org. Arial sells mass e-mail marketing software.
“Spam has polluted our inboxes and phishing has made us distrustful of opening e-mail from our own banks, for example,” Adams says. “The medium of e-mail needs to be rescued, and I have long argued for a solution that would require some sort of expense to be paid by mass e-mail senders. When you change the economics by making it unprofitable to send spam, the spammers will pack up and move.”
The Goodmail program is simply a service retailers can employ to help ensure e-mail delivery, says Sam Cece, CEO of StrongMail Systems Inc., a vendor of e-mail infrastructure software that has worked with Goodmail and other companies to integrate e-mail reputation and other systems into its software.
“I am not jumping on the ‘taxing the Internet’ bandwagon,” Cece states. “Retailers know they need to develop best practices to ensure their e-mail gets delivered. They use list hygiene, authentication services and other methods. Certified e-mail is just another option.”
And Salai of CD Universe, who expresses concerns about the service, nonetheless sees advantages. “We rely heavily on e-mail marketing and search engine optimization. If the costs of certified e-mail can be justified by even a small increase in conversion, it would be worth considering.”
For its part, Goodmail says its service is a practical alternative, in part because the e-mail inbox is, as the company puts it, a dangerous place. It has described its service as a “safe and reliable class of e-mail to help shield consumers from spam, fraud and phishing attacks.”
Is it safe?
“None of us can look at a commercial message today and be comfortable it is OK,” says Goodmail CEO Gingras. “Certified e-mail was created as a class of e-mail to allow consumers to easily see that a message is authentic. We are taking great efforts with AOL and Yahoo to ensure legitimate messages are clearly seen as legitimate. Certified e-mail is about offering companies another class of e-mail they can use to communicate with consumers.”
As history has proven, change-whether good or bad-often is met with great resistance. In this case, the reservations and criticisms being expressed may help guide the ongoing evolution of the Internet.
“It’s a troubling but exhilarating issue,” says Hoffman at the Sloan Center for Internet Retailing. “We’ve reached the point in the commercialization of the Internet where it is appropriate to have discussions about changing the economic model. In principle, it is interesting having ‘tariffs’ based on levels of service. But this particular case does raise some troubling issues.”