AUCKLAND, New Zealand—Megaupload founder Kim Dotcom is launching a new version of his now-defunct file-sharing website 12-months after U.S. charges were laid alleging criminal copyright infringement and conspiracy to commit racketeering.
The launch of the new site, called Mega, comes as Mr. Dotcom, who was arrested in Auckland last January, and three codefendants in New Zealand continue to fight extradition to the U.S. for trial. The U.S. Federal Bureau of Investigation had shut Megaupload, which the FBI alleged was used to pirate entertainment content valued at US$500 million.
Mr. Dotcom said lawyers have examined the new site, and he is confident it is compliant with the law. The site promises increased privacy to users through encryption of every file loaded onto the site, according to the Internet entrepreneur.
Brendon O'Hagan for The Wall Street Journal
Kim Dot Com at his house in New Zealand on Saturday
The new site was developed by Mr. Dotcom, 39 years old, and his fellow defendants—Megaupload chief marketing officer Finn Batato, 38; chief technical officer, director and co-founder Mathias Ortmann, 40, both from Germany; and Dutch national Bram van der Kolk, 29—as they wait on bail for a decision on whether they will be extradited to the U.S. All have denied the charges.
Mr. Dotcom, who was jailed and whose house was raided, talked to The Wall Street Journal from his sprawling mansion north of Auckland about his new venture.
WSJ: Do you want your day in court?
Mr. Dotcom: If it comes I will own it because I know I am innocent. There is nothing I need to fear. We have it all together. This whole indictment is crap. We will show the malicious and bad faith construction of this case so if they want to go there I'm game. [For their part, authorities claim Megaupload and its collection of websites generated more than $175 million in criminal proceeds as well as causing more than half a billion dollars in harm to copyright owners.]
WSJ: What can you say about the new site?
Mr. Dotcom: I would say the biggest new development is on-the-fly encryption. Without having to install any kind of application—it happens in your browser in the background—it encrypts giving you privacy. This means when you transfer data anyone sitting on that line will get nothing as it is all scrambled and impossible to decrypt without your key. This is going to take encryption to the mainstream.
We have some servers in New Zealand, we have some servers in Europe and we have invited hosting partners to sign up to join us. Basically anyone can connect a server in their hosting facility, hook it up to Internet, give us access and we can make it a Megaserver. Every file that is being uploaded to Mega is not just on one server, meaning if one hosting company goes bankrupt then those files will be on least two servers in the world and in two different jurisdictions.
WSJ: Do you see Mega getting as big or bigger than Megaupload?
Mr. Dotcom: I think there will be these early adopters who will try the new Mega, and it's just so good that it's going to spread. It will hopefully take off within a year, and it's going to be a significant player in the Internet. Because of the unique model of the business and the unique features we should see quite some growth.
WSJ: You are facing jail for your role in Megaupload, so why launch a new site?
Mr. Dotcom: We said we can't just sit there and play the game of them delaying everything; we can't just put our lives on hold and have them seize all our assets so we can't afford proper lawyers and just let them make all these tactical nasty moves. We said if we go along with that we are wasting our talents; we are wasting our know-how; so we decided from September last year to do something new. We thought let's use all the experiences and know-how of seven years to create the best cloud storage business that the world has ever seen.
This is probably the most legally scrutinized Internet site in the history of the Internet. Every single pixel on that site has been looked at by lawyers and of course we are fully compliant with all laws.
WSJ: But with encryption how can you prevent objectionable material being uploaded?
Mr. Dotcom: Child pornography is a matter of concern, but just like Megaupload people can take things down. If someone identifies something that is wrong they can contact us and ask us to take it down and we will. We will be fully compliant with the law and assist the authorities.
WSJ: Where do you stand on Internet piracy?
Mr. Dotcom: I think piracy is wrong if for example if it's music. If you can right now find a song that is 99 cents and you can listen to a snippet for free to decide if you want to buy it and then you download it for free, then I would say ethically that's a challenge. But with movies I'd have to say because of the business model Hollywood has, they are forcing people into piracy. People say if you don't give it to me [immediately] that's nuts, I'll get it somewhere else. When it comes to movie piracy I think the mistake that needs to be corrected is by the content owners not the Internet users.
WSJ: So could piracy be combatted by a new model?
Mr. Dotcom: Imagine what Hollywood could do if they had an Internet business that would make all of their content available to everyone in the world at a fair price, they would be an even bigger company in terms of valuation than Google GOOG -0.96%is. You could do this either through having a search engine or having a really nice iTunes-styled website where you could find anything and you can click on it for a buck or you register for a flat fee per month. The moment you do that—even though your price lowers significantly—all of sudden you monetized all of these people who are currently downloading for free.
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