The Spammer Next Door

The lawsuit was settled out of court.

With hostility toward bulk e-mail rising, Lynn has tried to diversify.

Last year, his company unveiled a product, NewtonKnows, designed to deliver advertising from a perch on users' desktops. Adware, which detractors call spyware, piggybacks on other downloaded programs, such as screen savers or music-swapping software. Once installed, the software monitors users' surfing habits and feeds them targeted pop-up advertisements.

NewtonKnows wasn't a simple parasite. Its toolbar offered utilities: spell-checking, e-mail alerts, auction tools. One of its inventors, Mike Reed, spent hours in online forums trying to assure privacy-minded users that NewtonKnows had value, that it helped deliver free software, that without advertising, economies crumble.

In his postings, Reed is the model of earnestness. "I am bound and determined to prove that we can deliver high-quality features for free, using real target advertising and a great deal of flexibility as the revenue source, and that we can achieve a real win/win," he wrote in one entry at SpywareInfo.com

Reed opened the floor to constructive criticism. He received an eyeful. "Not On My Computer Laddie!" typed one forum guest. "MY DESKTOP IS PRIVATE PROPERTY, NOT YOUR PERSONAL f*ckING BILLBOARD," entered another.

Reed received users' sometimes harshly worded complaints with good cheer. ("Your feedback is honest, heart felt and expressive," he wrote.) In a few instances, Reed took their side. He seemed to regret that certain programs installed NewtonKnows without a user's permission: "I just did some research and we are a mandatory install on three packages right now: statblaster, aaascreensavers and audiobliss. Wish I had some different news to report."

NewtonKnows was still being refined when Reed participated in the forum. Reflecting the spirit of openness among programmers, Reed assured users that he would carry their advice into product meetings. "I hope that with your help that I can make your points heard and that the business logic behind being good citizens will assure that we selected the right path," he wrote.

One meeting of NewtonKnows brass was scheduled to take place at 1:30 p.m. on August 25, 2003. In an 11:20 a.m. posting, Reed seemed hopeful that users would appreciate his mockup of an installation panel, which showed the features included with the product. He promised to lobby for other user-friendly improvements.

Five hours later, Reed returned to the forum. His report was brief but telling: "The meeting did not go well ... enough said." He punctuated his sentence with a sad-face emoticon.

In the forum's last entry, posted two weeks after the meeting, a user noted that Mike Reed had resigned from the company and had posted in another forum looking for a job.

NewtonKnows was eventually scrapped. Lynn says it was a "convoluted value proposition" -- in English: Consumers, finding the advertising more annoying than the features worthwhile, uninstalled it in droves.

Two years ago, Lynn told the Star that Virtumundo was the nation's largest "targeted e-mail advertising" company. To hear Lynn today, Virtumundo is a minor player.

"We send out of a lot e-mail," he says. "There are a lot of people in our database. But generally speaking, I think, Virtumundo -- again, I haven't been with Virtumundo for three or four months -- they're probably below the top 1,000 e-mail marketers, I'm going to say. So it's a lot of mail, but relatively speaking, there's many more."

Virtumundo gets paid for the number of responses it generates, not the number of e-mails it sends out. The model rewards accuracy and relevance. ISPs and major clients, such as Wal-Mart and S.C. Johnson, will not countenance mindless spamming, Virtumundo officials say.

Virtumundo CEO Michael Shopmaker says the company even refused to deliver an offer from Weight Watchers because some of the successful dieters were photographed in swimwear -- cheesecake being a hallmark of spam.

But Lynn concedes that Virtumundo has sent unwanted mail. "We struggled with that for years," he says. "The fact of the matter is, we only mail to people who opt in. We honor unsubscribes. We make every attempt possible to prevent the receipt of mail that people aren't interested in. Direct marketing's not perfect, but we try our very best."

Lynn also concedes that spam is such a plague that users may not differentiate between "good" and "bad" e-mail advertising. "The average consumer considers spam is spam is spam," he says.

Lynn defends his baby but keeps his distance from it. He consented to be photographed for this story, then backed away before finally agreeing to send his own photo. "Considering the article is mainly about Virtumundo, I don't want to upstage the new CEO," he wrote in an e-mail. "It's bad form on my part."

Lynn's evasiveness extends to his company, apparently. In the "About Us" section of the Web site of his new company, Adknowledge, there's a tale that essentially tells the evolution of Virtumundo itself.

But the V word is nowhere to be found.