Closed platforms could cut high costs of fraud and spyware

Consumer Reports found more than $8bn in online fraud, another $7.8bn spent by consumers to repair or replace computers damaged by spyware and viruses--over a two year period. It is amazing that people still use the Internet and find it useful.

The Consumer Reports figures don't factor in the hidden costs of click ad fraud, which could be as high as one click in eight being fraudulent. Consumers pay because of higher marketing costs by retailers.

And also what about the lost time people spend dealing with viruses, spyware, spam etc. There must be several billions dollars in lost productivity that should be added to the damages caused by fraudsters and spammers. That is a very large bill to pay and yet it is one that people still seem to be willing to pay because of the other benefits.

But not everybody is going to be willing to continue to take risks on the Internet and that is a problem that the industry needs to tackle. How do you make it safe for users?

There are a number of different approaches and technologies to use. AOL, for example, could have created a walled garden, a safe(r) place for users. Instead it decided to open up to the Internet, an example of it again, choosing the wrong business strategy.

Users could be told to use security software and to keep an eye out for social engineering scames but this requires a considerable level of education in installing and maintaining the security packages.

Another approach is to create closed platforms as in the cell phone market. The cell phone service provider chooses the phones, the applications, and handles billing. A cell phone service is a more secure place than the wilds of the Internet.

Why not a GOOG or YHOO PC? It could be inexpensive, it could be sold as a service. And it would have consumer applications such as photo editor, word processor, spreadsheet, etc. It would have a browser but it would only communicate with trusted web sites, GOOG validated sites, for example.

And if it used technology such as that from Wyse, it could be set up as a thin computing system and it would be highly secure because a central server would determine what applications it would run, and prevent spyware or any other malware from causing damage or exposing users to fraud.