“Vice-president of ideas, idealab”: did any job title better catch the Zeitgeist of Silicon Valley at its bubbliest? Surely the holder of that position is now cleaning tables in some Palo Alto diner? Actually, no. Scott Banister, the ideas-man in question, is proof that there is life after dotcom death.
After idealab, a pioneering Internet “incubator”, abandoned plans for an initial public offering that was once expected to raise $10 billion or more, Mr Banister and a colleague, Scott Weiss, started IronPort, a firm dedicated to improving the efficiency of e-mail delivery. Despite a drought of venture capital, they have already raised $20m, and next week they roll out what they hope will be a killer app: a novel solution to spam, the dark side of e-mail.
Every user of the Internet knows the frustration of an inbox clogged with unwanted correspondence from vendors of porn, cheap loans and anatomical enlargements. More recently, there has been a new frustration: anti-spamming filters that rebuff genuine correspondence. According to Mr Banister, “false positives” can account for up to 30% of the “spam” identified by some filters.
This can be more than annoying — valuable correspondence may never be delivered. The growing ingenuity of spam senders has made life hard for conventional filters. Obscenities are easy to scan for — but as the acceptability threshold of a filter is raised, to include words frequently but not exclusively used in spam (cheap loan, or enlargement, perhaps?), legitimate e-mail is increasingly misidentified.
The IronPort entrepreneurs think they can solve the problem. Their track record suggests they know how to deliver a successful Internet product. Mr Weiss was a founder of the free Hotmail service, and made a fortune when it was sold to Microsoft. Mr Banister came up with an e-mail list-hosting service while in college (he is still only 26). It is now Microsoft’s listbuilder. He also claims some credit for Goto.com (now Overture), an Internet search engine that lists sites according to how much the site pays to appear when a specific keyword is entered.
Overture is one of the few unsung triumphs of web content, with a market capitalisation of $1.7 billion — down from its $6 billion peak, but still significant. And it is profitable. Mr Banister reckons that the key to its success was that it took economics seriously: buyers will not pay for a high listing if searchers do not value it, and thus reward it, when they find it. Its new anti-spam system also uses economic intuition, by requiring senders of e-mail to state clearly whether they are sending spam, and to back that statement with their own money in the form of a bond that will be forfeited if it turns out that they are lying. The idea, simply, is that, if the price of sending spam rises, less of it will be sent.
Servers fitted with IronPort’s spam-recognition system will be able to identify “bonded senders” by their web addresses, and can block senders that are not bonded. Next week, it expects to announce that many of the best-known senders of non-spam bulk e-mail have signed up, along with the big Internet service providers, to its bonded-sender programme. The size of the bond will change over time, but is likely to be around $100,000 initially. The number of complaints made by recipients of e-mail from the sender will determine whether the bond is forfeited, in full or part. According to Mr Banister, “the first complaint will not cost you much, a 3-4 digit number will cause pain to the bonded sender and 10,000 or more will result in the most severe punishment.” Here’s hoping it works.