What’s the controversial site Megaupload.com all about?

Megaupload, the file-sharing website shut down Thursday by the U.S. federal government, is a Web hosting tool that now finds itself accused of being an online haven for digital pirates. Many people probably never have heard of the site. But to millions, the 6-year-old site, based in Hong Kong, was a fast, easy way to store massive files in a “locker” online and then share them with friends or colleagues. At various points in its history, Megaupload has been among the most popular websites in the world. And it once had the support of some celebrities. A (really bizarre) YouTube video shows Kanye West, Kim Kardashian, P. Diddy and several other celebrities vouching for the site in an apparent music video-style advertisement. But the site has long suffered accusations of allowing less-than-legal files to pass through its computer servers. “Megaupload was always going to get taken down – far too flagrant publication of copyrighted material,” Jonathan Riggall, a website editor living in Barcelona, Spain, wrote on TorrentFreak, a blog devoted to file-sharing issues. “I think sharing on the Web is great, and I don’t care if it’s copyrighted material – but Megaupload and some similar sites are making loads of money out of making it possible for people to view pirated stuff. Of course they will be targeted as they are blatantly breaking laws.” The U.S. attorney for Megaupload.com denies the government’s allegations. ‘We believe that the allegations are without merit and Megaupload is going to vigorously defend against the case,” attorney Ira Rothken said. Created in 2005, Megaupload was the 72nd-most-visited site on the Web during the past three months and has peaked as high as No. 13, according to Internet traffic analytics firm Alexa. The site offered what’s called “one-click hosting,” letting users upload anything on their hard drive or in cloud storage to the Web. The service gives users a URL that can then be shared with others – often on discreet online message boards or social networks – letting them access the file as well. MegaVideo was the site’s video service, letting even nonmembers view more than an hour of video at a time on the site, and MegaPix was a photo storage and sharing site in the mold of Flickr or Photobucket. People who paid for a premium account on the site were able to upload and download larger files. It was, by all accounts, a successful business model. The U.S. government said that it seized $50 million in assets and that much of the $175 million the site has earned since 2005 was due to copyright infringement. As Ars Technica notes, even the site’s graphic designer reportedly earned $1 million last year, and between them, the seven indicted people (including the creatively named Kim Dotcom) owned 15 Mercedes-Benzes, a Maserati, a Rolls-Royce and a Lamborghini. The blog TechCrunch has posted photos of seized assets, including the cars and a large house in New Zealand, in case you’re interested. Publicly, at least, the site frowned on illegal uploads. It featured a tool to report “abuse,” gave copyright holders the ability to hunt for illegal content and registered with the U.S. government under the Digital Millennium Copyright Act, a law aimed at fighting piracy. The site’s owners have denied any wrongdoing in regard to copyright violation, and their attorney has said the site was wrongly shut down before its owners were allowed to address the charges against them. But the Justice Department says the anti-theft efforts were a facade – that Megaupload’s employees knew they were enabling piracy and made the site difficult for outsiders to search for illegal material. In an unofficial sampling of CNN Tech readers on Twitter, many quickly acknowledged using the site to watch TV shows or movies. But others cited more legitimate uses, with some saying they’ve lost legitimate content, not to mention money, after the government crackdown. Seng Ung of Boston said he recently paid roughly $260 for a lifetime membership so he could store old files from childhood and college. He didn’t lose them, but now he’s gotten nothing in return for his payment, he said. Developers of open-source Linux and Homebrew software said they used it to upload projects they were working on together. Musicians, as well, said they stored songs for collaborative projects there. One user said she used it for sharing large zip files of photographs that were too unwieldy to send via e-mail. “Megaupload was closed by the FBI … was I the only ones who had it for work files?” Twitter user Nina Andrade wrote. “Just get me my files back!!!” The charges come at a time when online piracy is a hot topic. New legislation before the U.S. Congress – which would have cracked down on piracy but, according to critics, would also have endangered free speech online – has stalled at least temporarily after a massive online protest this week. (Full disclosure: CNN’s parent company, Time Warner, supports that anti-piracy legislation.) Some people online say the Megaupload takedown, which came a day after Wikipedia and other sites went black in protest of the pending legislation, was largely symbolic – singling out one site while bigger ones still thrive. With a couple of quick clicks on a pair of well-known file-sharing sites on Friday, CNN was able to see that Metallica’s entire discography, every “Doctor Who” episode for the past six seasons and Steven Spielberg’s epic “War Horse,” which is currently playing in theaters, were offered up for download by anyone seeking out those files.