March 31, 2006, 12:00 AM

Boston Tea Party?

A plan by AOL and Goodmail to charge marketers for delivering e-mail has some up in arms - and others welcoming it with open arms.

Given that they did so little advance public relations, it’s a safe bet that America Online Inc. and Goodmail Systems Inc. didn’t anticipate the industry uproar over AOL’s plan to charge bulk e-mail senders to smooth the path to AOL users’ inboxes.

But if they were expecting their plan to be a non-event, they were mistaken. As soon as word got out that AOL wanted to charge 1/4-cent per e-mail to guarantee that a marketer’s message arrived, and arrived intact, in an AOL user’s account, some forces began mobilizing to oppose it and others to support it.

Two points of view

“This seems like an unnecessary tax and most likely would have to be factored into the cost of doing business,” says John Salai, director of marketing for online music retailer CD Universe. “It’s an unfortunate situation when a company with valid customer e-mail addresses must pay to insure customer-requested e-mails go through.”

Other retailers have embraced the plan. “I’m very excited about certified e-mail service. It can enable retailers to separate our messages from the noise and spam that consumers are constantly bombarded with,” says R. Preston Wily, vice president of business development at Sewell Direct, a computer vendor. “Right now our open rate for opt-in e-mail campaigns is much lower than it should be because our customers are using default filter settings that often erroneously identify us as spam.”

And then there’s the great middle that’s confused. “I’ve never seen more misinformation and hullabaloo on a topic in this industry,” says Loren T. McDonald, vice president of marketing at EmailLabs, which sells e-mail marketing software and services.

America Online announced late last year that it’s launching a certified e-mail service using e-mail reputation vendor Goodmail Systems’ CertifiedEmail program. Then Yahoo Inc. announced it’s testing the same service. Ever since, many in industries that rely on the Internet, civil liberties groups, analyst firms and other organizations have been up in arms, dubbing the fee for the optional service a tax.

Focus on AOL

The focus of the uproar has been on AOL, in part because the company is the first ISP colossus to offer this service to online retailers and marketers; Yahoo has said for the time being it is only testing the service. Another source of concern has been that AOL opted-at first-to use only one e-mail reputation vendor, Goodmail. It has since changed its stance and now is investigating the use of other e-mail reputation companies.

Because of an abundance of incorrect information and rumor, concerns quickly developed into today’s uproar. In response, AOL and Goodmail recently conducted a webinar in an attempt to allay industry concerns. They said this is the story:

- The Goodmail service, which AOL officially launched last month, guarantees delivery of intact marketing e-mails to AOL subscribers’ inboxes through a certification process. In recipients’ e-mail boxes, an icon is displayed next to certified e-mails to show they are “safe.”

- The service is optional.

- The cost is approximately 1/4-cent per e-mail; AOL will offer the service for free to not-for-profit organizations.

- AOL will continue to operate its standard and enhanced whitelists, which move reputable e-mail marketers’ mail to inboxes with little interference from AOL.

- Non-certified e-mails will be handled precisely as they have been-nothing will change.

- Links and images in all e-mails will or will not manifest as they have. Some examples: Links and images do not appear by default for AOL software 8.0 and higher; users can change that setting. AOL’s enhanced whitelist ensures the delivery of intact links and images for companies on that list. Links and images defaults vary by ISP and e-mail software.

- AOL subscribers sending e-mails, and any individuals sending e-mails to AOL subscribers, will not be affected by the service, nor will they be charged. The service is aimed at businesses.

“This is the reality: The Goodmail concept and others like it are like Federal Express 20 or so years ago,” McDonald says. “If your delivery is critical, you know it will get there, on time, and in the format you want it. But it’s not a requirement. It’s an option for those companies who want to participate. If companies don’t want to, it’s business as usual, not the end of the world.”

A new layer of protection

Where the confusion came from is difficult to say. A press release on the Goodmail Systems web site, for instance, does not mention anything about AOL continuing or discontinuing whitelists, the alleged discontinuation of whitelists being one of critics’ chief complaints. In the release, an AOL executive refers to the Goodmail CertifiedEmail service as an optional “new layer of protection.” An exhaustive search of the AOL corporate web site, however, did not turn up any press releases related to this subject. AOL chose not to provide executives or interviews for this story.

Some industry observers believe the uproar stems from the fact that such certified e-mail is a new line of revenue for ISPs and other companies. Many professionals in numerous industries that use the Internet have resolutely labeled the service a tax.

“There is much cynicism that this is simply about money,” says Donna L. Hoffman, professor and co-director of The Sloan Center for Internet Retailing at Vanderbilt University. “And there is no way small companies can afford to do this. It is unfair for the thousands of small retailers the Internet has allowed to flourish. You can start to look at it as a tax when retailers have permission-based relationships with their customers but have to pay to ensure e-mail delivery. That is ridiculous.”


The issue has been positioned that if you place a levy on business e-mail, it will stop spam-and that is false, says Des Cahill, CEO of Habeas Inc., an e-mail reputation vendor. “The spammers will not participate and you are penalizing legitimate senders,” Cahill contends. “Money being spent on postage or a tax is the wrong way to spend money. What the industry has been asking legitimate companies to do is invest in improving their e-mail practices, use authentication technology, segment their lists, opt people out promptly. So if their budget is going into paying a tax, how will they invest in further cleaning up their act?”

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