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Hyped to the hilt: Kim Dotcom unveils Megaupload's successor

Kim Dotcom preparing latest file-sharing project despite an ongoing criminal copyright case

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With characteristic bombast, Kim Dotcom unveiled a splash page today for his Mega file-sharing service, a successor to the imperiled Megaupload that has landed its founders in deep legal trouble.

The launch of a new service, set for 20 January, could be a risky endeavor for Dotcom, who along with six others were indicted by a grand jury on criminal copyright infringement charges in US federal court in January and face possible extradition from New Zealand.

He has revealed few details of the service, but in an interview last month in Wired magazine, said that Mega will only store files that have been encrypted by the service's users. Only those users would have the power to share the key to unlock the content.

In theory, the encryption scheme would give Mega's operators plausible denial that it has knowledge about what users are uploading to the network, acting as a buffer against legal action of the type Megaupload faces now.

On the splash page, Mega is described as a cloud-based storage system that allows users to share their folders. Mega claims it will be faster than Megaupload, which had its storage systems located in "expensive premium data centers."

"Now, thanks to encryption, we can connect a large number of hosting partners around the world without worrying about privacy breaches," the site says. "Our servers will be closer to our customers. This will result in faster data transfers."

Mega is looking to partner with hosting providers and said it would prefer to pay those providers monthly for unmetered access. Advertising also appears to be a planned revenue stream, with Mega also offering hosting providers advertising space.

While it has raised enough capital to launch the service, Mega said it is looking for investors in order to provide a free service to users for as long as possible.

Dotcom claimed on Twitter that "millions" of people were accessing the splash page at "me.ga," a domain name that actually redirects to Kim Dotcom's personal website. The domain "mega.com" is unavailable, as it is owned by an IT company specialising in enterprise architecture.

Expecting high traffic to Mega, Dotcom wrote: "We will need 60 state-of-the-art portal servers when the new Mega goes live. One thing is sure: The world wants MEGA!"

The splash page says "We promise, We deliver. Bigger. Better. Faster. Stronger. Safer. Mega," and has a form for people to submit their email addresses for more information.

He also wrote that he detected IP addresses belonging to the US Federal Bureau of Investigation, one of the agencies that had a hand in shutting down Megaupload on 19 January.

Dotcom along with Finn Batato, Mathias Ortmann and Bram Van Der Kolk are living outside Auckland at Dotcom's mansion in Coatesville. They're fighting the indictment in part on an argument that the US never served the company properly since its headquarters were located in Hong Kong.

The case has hit many snags, with a New Zealand court finding that search warrants executed at Dotcom's property were too broad, and that evidence seized there was copied and sent to the US without permission.

Also, New Zealand's government admitted one of its intelligence agencies illegally spied on Dotcom. While Dotcom holds German and Finnish passports, he is a permanent resident of New Zealand, which would have made that type of surveillance illegal.

Another issue that has yet to reach resolution is the fate of files on Megaupload's servers that did not violate copyright law. The servers, which are offline now, are held by Carpathia Hosting. One user, Kyle Goodwin, is arguing that his data should be returned.

The US Department of Justice alleges Megaupload collected US$175 million in criminal proceeds, drawn from subscription revenue and advertising.



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