Soaking In Spam.(internet advertising)

Scott Richter doesn't mind telling you how successful he is. His 28- employee company, OptInRealBig, clears $2 million in sales each month. He drives a Lexus convertible and a Lexus SUV, owns a half-million- dollar home outside Denver, Colorado, and just returned from vacation on the Caribbean island of Anguilla. But the 32-year-old former restaurateur has made his small fortune in an unpopular way: sending out 80 million e-mail advertisements a day. He hawks diet pills, porn sites, sexual aids and miracle products. He's also impulsive and resourceful. During the Iraq war he churned out ads for copies of the Pentagon's Most Wanted playing cards.

Although Richter practices a reviled occupation on the Net, he says he never makes false claims in his ads and that there's nothing wrong with unsolicited bulk commercial e-mail messages, or spam. He's also confident that bulk e-mailers are immune from new laws and lawsuits. "We can set up in another country within an hour," he says. "There are people in other countries who would love to sell us bandwidth."

Richter's insouciance and general visibility--his phone number is posted on his Web site--suggests an unpleasant fact about the eternal cat-and-mouse game that the Internet's spam war has become: the nefarious mouse is winning, and it's not even a close race. In the past two years spam has congested the Internet, threatened to overwhelm Internet service providers and sent Web surfers of sensitive disposition scampering away from their computers in embarrassment. Spam is now approaching 60 percent of all e-mail, according to the research firm Gartner Group. Ferris Research says spam puts a $9 billion annual drag on productivity.

The forces who say they hate spam--politicians, tech companies, beleaguered e-mail users and anti-spam vigilantes who spend their own time and money trying to clean up the Net--haven't managed to make a dent in the problem. Current approaches aren't working; even though home users and many companies started filtering their e-mail two years ago, the overall amount of junk mail has ballooned exponentially. Filtering and antivirus companies always seem one step behind the rapidly evolving methods of clever spammers. And most individual lawsuits against spammers have been defeated, settled or concluded with penalties unpaid and bulk e-mailing operations open for business.

Can anything be done? Reports from the front lines of the spam war show how traditional anti-spam tools are outmatched and suggest some promising solutions.

Filtering: Even when spam never finds its way to individual e-mail accounts, it creates havoc for Internet companies. Servers at AOL and Microsoft sag under the weight of a billion blocked spam messages each day; smaller ISPs that get fewer messages suffer even more. Barry Shein is the founder of The World, a small Internet service in New England. One day last week Shein arrived early at work to spend three hours personally sifting through his jammed e-mail servers and deleting thou- -sands of messages his filters caught. With so many flagrantly illegal spam techniques, Shein wonders why no one is slapping handcuffs on spammers. "Imagine being dragged out in front of your house and beaten ...