AOL Buys Challenge-Response E-Mail Firm Mailblocks

AOL said yesterday that it acquired challenge-response e-mail provider Mailblocks and soon will make the spam-fighting technology available to its users. Financial details of the transaction were not disclosed.

With the acquisition, AOL becomes the largest e-mail provider to use challenge-response technology, which aims to eliminate spam by forcing unknown senders to complete a “challenge.”

Mailblocks' system treats every piece of mail from a sender not in a user's address book as suspect. Mail from unknown senders is deposited in a suspect-mail folder, and the sender receives a challenge message to ensure that the sender is not a computer. This is accomplished via a link to a Web site that asks the sender to enter a numeric code seen on the screen.

E-mail marketers have eyed such systems warily because computers generate commercial e-mail and consumers rarely put businesses in their address books.

“We think challenge-response is an exciting technology that is not right for every user,” AOL spokesman Nicholas Graham said.

AOL plans to offer challenge-response as an option to AOL and Netscape e-mail users in the coming months. Its default setting will be off, and users can activate it with a single click. It also will use Mailblocks' Web e-mail interface as its own Webmail display. Graham said that integration should occur by the fall and will not replace the existing AOL e-mail client.

Graham said AOL would incorporate Mailblocks' “tracker” e-mail accounts for use in subscribing to e-mail lists.

Challenge-response systems do not have high adoption rates. EarthLink is the only major e-mail provider to offer a version of it, called SpamBlocker. Since its rollout last May, 673,000 of EarthLink's 5 million users have adopted it. Graham did not say how many users Mailblocks has.

“If AOL gets similar penetration rates as EarthLink, it is of concern to marketers,” said George Bilbrey, general manager of deliverability services at e-mail deliverability firm Return Path, New York.

A business-to-consumer e-mail list, in which AOL accounts can make up 20 percent to 30 percent of addresses, could see the number of challenges rise from 0.5 percent to up to 3 percent, Bilbrey said.

Mailblocks, Los Altos, CA, was launched commercially 18 months ago by WebTV founder Phil Goldman, who died in December. It offered free ad-supported challenge-response e-mail service and a subscription, ad-free version.

Graham said AOL would gain control of Mailblocks' patents on challenge-response e-mail systems. He said it would continue patent-infringement litigation Mailblocks launched against EarthLink in May 2003.

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