Topics include: programming, Apple, Unix, gadgets, large-scale web sites and other nerdy stuff.

How AOL Can Win

2005-04-21 23:12:40

People in the press and software industry often talk about how AOL is struggling to find new ways of making money, as their dial-up subscriber base steadily defects to broadband. I think I've figured out one way they can, and it has little to do with addressing the current target customer base of AOL.

The primary AOL customer is the non-computer-savvy average human. This is the largest percentage of the population, and if you are going to target a subset as your main market, that's a good segment to go after: the biggest one.

So AOL is doing clever things like including free anti-virus software and offering system management tools. Great. But $25 per month is a lot to pay for that kind of stuff when you could buy it a la carte for much less.

What if AOL had something already in their bag of tricks that every internet user in the world needs? Something that everybody, whether they use Windows, Macs, Linux, or anything really needs. Something that they would pay money for, they need it so badly.

Guess what? They do.

Let's talk about spam. Everybody knows about spam. There's a growing industry of software and services to block spam without blocking good mail. Some solutions work quite well. Most are pretty idiotic. They all are a band-aid on the fundamental design of SMTP, which is the protocol that is used for Internet email.

The great thing, and the horrible thing, about SMTP is that it allows for free-flowing communication between computers. I can send and email to you, and it will get delivered to you, pretty much guaranteed.

I can send the email from just about any computer in the world, any time I want, and it will get to your ISP or your company, and your ISP's computer will see it and say, "Oh this is for Jane. I know Jane, thank you very much, strange computer I have never seen before. You say this email is from billo? Great. I'm sure Jane will love to hear from him." This is a great way of doing things, especially in the earlier days of the Internet, when 99.9% of email was legitimately from one human to another human about something both of those humans cared about. Messages got through. People connected.

However, with the evil spammers out there, this open trusting attitude is trouble. Not only can I not figure out where a message is really from (without detective work that is beyond most people), I can not really tell if a message is from ebay, my bank, microsoft or some evil spammer or criminal just using their name.

So we build anti-spam software, and try to infer, via various trickery and forensics, that a message is legimate or junk. It's a hard problem, because the spammers learn to defeat the obvious flags. There's lots of good literature about this, and if you are interested, I recommend starting with Paul Graham's essays:

But we were talking about AOL.

I hinted that the big problem with the way email (SMTP) works is that there is weak authentication. That means that your company/ISP mail server can't really tell if a message came from your bank or some hacker pretending to be your bank. Perhaps more importantly, it's really hard to distinguish the hundreds of spam message you get in a day from the 10 or so that come from people you really want to talk to: your business colleagues that are outside your company, your family, your friends. (I assume that if you work at a company, at least the mail from within your company is generally separated and identifiable.)

What we need today, in this world of spam, is an alternate email system. One that anybody can join, but is authenticated. So you know when the mail "from" address says "[email protected]," you are 99.9% certain it is from your brother-in-law, and it will be given a free pass by your anti-spam software. There are a number of ways of creating such a system. Most of them are way too hard for normal humans to understand. At least one of them as proven to be quite popular and easy, and, guess what? AOL has one.

It's called a buddy system. AOL Instant Messenger is the biggest buddy system in the world. Supposedly there are over 100 million AIM users out there. That's a lot.

 If you are reading this, chances are you have one, or, if you don't, you have a yahoo account or an MSN account.

In my next essay I will describe how AOL can take the existing AIM system and turn it into the application that takes the bite out of spam, and makes a lot of money at the same time.

See Part 2 of this essay