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Friday, November 20, 2009

Scientists Discover How Spammers Make A Profit

2008/11/11 | CityNews.ca Staff

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Scientists Discover How Spammers Make A Profit

Work at home and make thousands!

Buy your prescription drugs over the Internet and save hundreds!

Guys: drive your women crazy with a guaranteed enlargement process!

Get the best in porn on your computer! Sign up now!

Sound familiar? Those are just a few of the typical come-ons we've all seen in our inboxes over the last few years, the growing scourge known as spam. Your email filters get rid of a lot of them, of course, putting them right where they belong - into the trash.

Most of us feel the same way about the odious unwanted messages. But if almost everyone deletes them, did you ever wonder how the spammers make any money and why the flood continues non-stop?

That question interested researchers at the University of California, Berkeley and UC, San Diego, who turned the tables on the malevolent mailers, hijacking one of their own programs called "Storm" to get the answer to that question.

The computer scientists reprogrammed the "bots" that were being used to send out the messages and turn unsuspecting infected users' machines into mass email zombies, effectively becoming temporary "spammers" for a month.

What they found may surprise you. It turns out it only takes one response from every 12.5 million of the letters the automated system sends out every day to allow them to make money.

The group used that old pharmaceutical approach common to spam, touting a false herbal remedy designed to enhance what's often euphemistically called "male performance." They designed the program to be sure it rejected any credit card information to ensure security. 

They wound up churning out nearly 350 million of the letters and then waited for the response. Only 28 people actually took advantage of their "offer" in 26 days, 'sending' in an average of $100 each. But despite the low return, they still earned a profit. 

"Taken together, these conversions would have resulted in revenues of $2,731.88 - a bit over $100 a day for the measurement period or $140 per day for periods when the campaign was active," they write.  

"However, our study interposed on only a small fraction of the overall Storm network - we estimate roughly 1.5 percent based on the fraction of worker bots we proxy. Thus, the total daily revenue attributable to Storm's pharmacy campaign is likely closer to $7,000 (or $9,500 during periods of campaign activity)."

It's not a lot of money but hijacking other people's machines means there's not a lot of overhead. It costs them almost nothing to send out the letters and anything that comes back results in a profit.

But how much of that do they keep? The researchers suggest some is split between the programmers and the supplier of whatever's being sold. "Next, we must subtract business costs," the study adds. "These include a number of incidental expenses (domain registration, bullet-proof hosting fees, etc) that are basically fixed sunk costs, and the cost to distribute the spam itself."

In the end, the numbers suggest that the cost of "two or three good programmers" is what they need to turn a profit and anything more than that simply isn't economically viable.

Yet the stuff continues to get spewed out.

Is there hope on the horizon?

The scientists say the answer is yes, because of the very economics that allow them to continue.

"The profit margin for spam (at least for this one pharmacy campaign) may be meager enough that spammers must be sensitive to the details of how their campaigns are run and are economically susceptible to new defenses," they suggest.

But until those 'defenses' kick in, keep your email filters up to date - and keep hitting the delete key.

Read the study here.