Sanford Wallace was once the most hated man on the Internet. His sin was spam, those annoying junk e-mail messages, and he was good at it. He sent so much _ an estimated 25-million e-mails a day _ that he was effectively banned from cyberspace.
Now Wallace is back, bigger than ever. His new business, SmartBotPro.Net, has quietly climbed the charts to become the Web's 24th-most-trafficked site, visited by an estimated 6.2-million people in November, Media Metrix ratings service says.
The secret to Wallace's newfound success? Advertising by e-mail. But he says he has learned his lesson: He never sends electronic missives to anyone without first getting permission. "I have a better understanding of people now," he said.
The rehabilitation of Wallace is a testament to how swiftly people can reinvent themselves on the Net. But it also shows how tolerant the Web has become toward marketing. When Wallace started his spam business, Internet users complained about any sort of online ads. Now, we're resigned to being pelted with cyberspace pitches.
Wallace's comeback also underscores the irresistible economics that gave rise to spam in the first place. Electronic mail is an ultra-cheap, ultra-simple way to get a message out. And that means we're stuck with spam _ and endless varieties of e-mail marketing.
Wallace dished out his first spam in 1994. A college dropout whose previous business ventures included a hotcake delivery service for a nearby International House of Pancakes, Wallace had just joined America Online. He was fascinated by the message boards that served as electronic classified ads for AOL members. Here, he thought, was a market ripe for direct-marketing tactics.
So he compiled a list of 8,000 e-mail addresses gleaned from the message boards and began mailing out promotional messages on behalf of advertisers. In two weeks he earned $10,000. Spurred by that success, he enlarged his list. Soon his company, Cyber Promotions, was beaming out mass e-mailings for entrepreneurs hawking everything from insurance to vitamins.
The response was stunning. Internet users, irked by the cheesy ads piling up in their electronic mailboxes, vilified Wallace as "Spamford" and "Spam King." Big online services sued him, saying the onslaught of spam overtaxed their systems and annoyed their members. By 1997, he had became a pariah, unable to find a company willing to supply him with the Internet connections he needed to send out his spam.
With SmartBotPro, the 31-year-old Wallace is back in the e-mail business. Here's how it works: Anyone who wants to promote anything by e-mail can go to SmartBotPro (www.smartbotpro.net) and sign up for a free account. Account holders get an e-mail address that they can put on business cards, Web pages and ads, usually with a suggestion to e-mail the address for more information about a product or service.
When an Internet user e-mails one of those addresses, the SmartBot system leaps into action, sending out a canned message on behalf of the account holder. Account holders can program the system to send out follow-ups at regular intervals. Most of the SmartBot users were pitching offers such as this one: "Do You Want to Become a Millionaire? This site can put $400,000 in your bank account within four short months! All you need is 30 like-minded people . . . "
So how is this different from spam? Simple, Wallace says. The SmartBot messages are never unsolicited. They are triggered only by an Internet user sending a message to one of the special addresses asking for information, or "opting in."
For account holders, the service is free _ with a catch. Every e-mail message sent out by SmartBotPro includes a giant plug at the top of the message for, you guessed it, SmartBotPro. The tactic is intended to drive recipients to the SmartBotPro site, where Wallace displays a huge page of ads for such products as the NextCard Visa, which pays a bounty of $20 or more for each new card customer recruited by an affiliate site such as SmartBotPro.
As long as the targets have somehow agreed to the marketing assault _ no matter how tenuous their assent _ junk mail has come to be considered acceptable on the Internet.
"I'm in the same business I was before," Wallace said. "Now I just get permission first."