FAQ: What is Megaupload?

Greg Bowker/AP - Megaupload.com employees Bram van der Kolk, also known as Bramos, left, Finn Batato,second from left, Mathias Ortmann and founder, former CEO and current chief innovation officer of Megaupload.com Kim Dotcom (also known as Kim Schmitz and Kim Tim Jim Vestor), right, appear in North Shore District Court in Auckland, New Zealand, Friday, Jan. 20, 2012. The four appeared in court in relation to arrests made to Megaupload.com, which is linked to a U.S. investigation into international copyright infringement and money laundering. (AP Photo/Greg Bowker, New Zealand Herald) NEW ZEALAND OUT, AUSTRALIA OUT

The file-sharing site Megaupload was, at its peak, the 13th most frequently visited site on the Internet, according to the Justice Department. The site itself claimed 50 million active users per day, 180 million registered users and nearly 800 file transfers a day. Here’s a quick rundown on the Web site that was shut down by federal officials Thursday on Internet piracy charges:

What is Megaupload?: Megaupload is — or was — a file-sharing service that lets users upload and download files to its servers. With a similar business model to cloud locker sites such as Dropbox, Mediafire or SugarSync, Megaupload made it easy to transfer files that were too big for e-mail attachments.

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Megaupload also ran several other Web sites — such as Megalive, Megapix, Megabox and Megavideo.

Why was this company targeted?: Federal officials say that that the company was aware that many of its users were illegally posting copyrighted material to its servers and was looking the other way. Sites such as YouTube, for example, have measures in place to quickly — very quickly — take down any material that they believe has even the slightest whiff of piracy.

How do people use these file-sharing Web sites?: Users can share documents or other files on the site. Some independent game developers and artists use these sites to distribute their own content if they can’t afford to distribute their games and songs themselves. They can share those files with one another by generating unique URLs for the content.

How do these sites make money?: Most cloud lockers have “premium” paid memberships that grant access to quicker upload and download speeds and additional storage. Some also generate money from advertising.

Can people who had legitimate files on Megaupload access them now?: The Web has been hit by a host of complaints from people who say they were using Megaupload for legitimate reasons — hosting their own manuscripts, work files, music, etc. — and are completely shut out of those files. That’s a danger with cloud locker sites — users should back up their files to their hard drives or risk losing access to their own data if a server goes out or if, for some reason, the data is seized by the U.S. government.

Dropbox, for example, has a clear provision in its terms of service that states that it “cooperates with United States law enforcement when it receives valid legal process” and will unencrypt files before providing them to law enforcement.

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