How does it feel to be CISO of what is perhaps one of the most targeted companies on the Internet? I guess it's the old, 'You've got to be careful what you wish for' thing. Actually, it's been fun. I have enjoyed working here. It's a job you can really sink your teeth into. It's a great culture, it is very entrepreneurial, it's relatively easy to make decisions and get funded and to make an impact.

Why do you think PayPal is targeted so much by malicious attackers? That's an incredibly easy answer to give. Actually, there are two reasons. One is we have a very large customer base by the standards of most companies. We have 133 million customers on a global basis. We also have a business model that makes it easy by design to move money around between those 133 million individuals. By definition that's going to make both us and our customers targets. That's one of those things there isn't much to do about other than make it as difficult as possible for the bad guys to victimize them.

What's your biggest security challenge? Essentially, the most significant issue is phishing. It is not so much a financial issue because we make our customers whole. If a consumer ever does get victimized by phishing we 100 percent reimburse them. But clearly it causes a perception problem. Phishing definitely is something we hear [about] loud and clear from our customers. They want us to take that away and we are actually working very actively on addressing that. We don't believe it's a problem that there is a single silver bullet for. We also think it is an industry problem. In fact, quite a lot of what we are trying to do is link the industry in coming up with a solution. But we do want to make a significant dent. Of all of the things that we worry about, this is pretty much top of mind for the company.

So what is PayPal doing in this regard? Basically, what we are doing is taking a broad brush strategy. It has a number of elements. Essentially, it is incredibly simple and yet incredibly hard to argue against. If consumers don't receive phish mail in their e-mail inbox it's kind of tough to victimize them. Sometimes people say, and I don't subscribe to the belief, that spam is an uncontrollable problem. If you mean, can you catch every bit of spam and phish mail -- that is probably very difficult to achieve. But can you deal with it such that you see very little spam and very little phish mail? I would submit [that] technically we already know how to do that. I am actually a great poster child for that because I have had a personal e-mail address since 1996 but I see effectively no spam when I have my spam control filter turned on. But I see hundreds of spam mails a day when I turn my spam filters off. So I don't believe that we can't solve the problem; I just think by and large we haven't put the controls in front the consumers.

What sort of controls are these? A couple of years ago, there was a lot of discussion in the industry about digitally signing e-mails on their way out of corporations like ours. And then there was a standards war and essentially all the momentum got lost and by and large nobody did anything. We have decided that it is time again for somebody to take a leadership position. We are in fact completely agnostic about what drives standards. We would prefer to go with what we want but as it stands today there are two perfectly functional ones: SPS and Domainkeys. We are all ready 100 percent to start signing all outbound e-mail from [eBay and PayPal] using both SPS and Domainkeys. [Also] we are working with the major ISPs [such as] Yahoo, MSN, Hotmail, AOL and [the] Gmails of the world. Between the top six, they account for more than 50 percent of the consumers in our inbox. So what we are doing is simply working with those ISPs and giving them permission, if they see a piece of e-mail that claims to originate from us, but is not legitimately signed by us, to delete it. I think by the end of this year we actually would have done that with several ISPs. I can't give you any dates or any names or by when but that is absolutely something that we have in the works. The other thing we are doing is finding ways of working with the e-mail client vendors to make it much clearer when e-mail has been legitimately signed or not. So even in the e-mail inbox, a consumer can look at it and say of these six e-mails that purport to come from PayPal, five are not properly signed but one of them is and that must be the legitimate one.