OpenDNS Makes $20k/day Filtering Phishing And Porn Sites

OpenDNS, a San Francisco based startup founded by Minor Ventures and David Ulevitch, first launched in mid-2006 as a free tool to speed up web surfing and protect users from phishing and other malware sites.

OpenDNS isn't exactly a sexy service. Users have to do some basic configuration of their computer to get it going, and once it's running they rarely see it again.

Here's when you do see it - when you type in or click a link to a "bad" site, OpenDNS redirects you to their own page instead, which includes search results and contextual ads. The site has become a hit with schools and businesses that want to filter out any of 50 categories of websites (things like gambling, porn, social networking, etc.). Users can also whitelist or blacklist individual sites.

The service now has 500,000 registered accounts. But the real number of users is far more than that. You don't have to register to use the service. And a single registered account can represent tens of thousands of actual users. Ulevitch says one school account has 36,000 users, for example. Another account, a hospital, has 5,000 beds and wifi for patients.

The service resolves about 7 billion DNS queries per day and serves about 2 million search pages per day. Revenue from search pages brings in as much as $20,000 per day. They currently work exclusively with Yahoo, Ulevitch says.

All that ad revenue lets OpenDNS offer its core service for free. That means organizations can add spam filtering to their networks without paying up to tens of thousands of dollars for competing filtering solutions.

OpenDNS also uses their community to drive new features and tag new malware sites. Users submit ideas and vote on them in a Digg-like interface. And when a user blacklists a site and tags it with a category, other users are asked to verify. If they do, the site is added to the general category blacklist as well.