My company wants to start sending mass mailings to about 4000 or 5000 recipients at a time. The company currently has an Exchange Server 5.5 computer with 400 users. I told the managers that the Exchange server has too much traffic to accommodate the mass mailings. Am I right?

I'm assuming that you're sending mail to people who want it; if you're spamming, shame on you. If you create one message with 4000 SMTP recipients, the Information Store (IS) will queue that message and pass it to the SMTP service, which will attempt to deliver it 4000 times. If you create 4000 separate messages, the IS will queue each message and deliver it separately. If you set up a separate Internet Mail Service (IMS) as an SMTP bridgehead for the mass mailings, Exchange will quickly move those messages from your real server to the IMS, where they'll remain in the queue until the IMS can deliver them. The last method is probably the best way to reduce the overall load on your mailbox server. However, all that outbound traffic will still have an impact on your Internet connection.

Probably the best way to perform this task is to investigate a third-party mailing company's (e.g., MessageMedia) solutions. These companies make software that sends mass mailings, and they offer you an easy way to manage the process of sending mail to a lot of people and automatically removing those who don't want any further mail.