Megaupload: The End of an Era

By Drew Muller

Well, Megaupload, it’s been fun. Your long and prosperous life has come to an abrupt close but let’s be honest, you probably saw it coming, right?

It might just be a hunch, but something tells me CEO/founder Kim Dotcom, a name that sounds like it should belong to a sensuous Internet vixen and not a burly German guy with an affinity for aliases, was a little too caught up in his self-pampering to realize he was making himself a target.

According to Information Week, Dotcom and other Megaupload executives owned a number of interesting assets, including 15 Mercedes-Benzes, fiberglass sculptures and jet skis, all of which were purchased with illegally obtained funds. Accused of accumulating $175 million in criminal proceeds, Megaupload was shut down by the FBI while Dotcom, along with four other individuals, was charged with a cache of crimes.

Megaupload was the first file-sharing giant to tumble, but will it be the last? How will we exchange files online with complete strangers and circulate copyrighted material without these sites? We could possibly be looking at the end of file lockers as we know it.

Users with both recreational and legitimate purposes are up in arms about the government crack-down, the former peeved that they might actually have to pay the exorbitant prices dictated by the music and film industries and the latter fearful for the safety of jobs that involve transferring large files.

But although Dotcom’s piracy campaign was forcibly grounded, I don’t think users have much to worry about. The death knell of Megaupload will signal a shift in the operation of file-sharing sites, an evolution in which the strongest will survive. This digital Darwinism has knocked off Megaupload for obvious reasons—excessive spending, rewarding copyright violators and obscuring its legal status with anonymous subsidiary companies—and the drastic response by the FBI has encouraged other sites to proudly profess their legitimacy and others to clean up their act.

According to Techcrunch.com, free-form file-sharing sites such as Filejungle, 4shared and Uploadstation are deleting premium accounts, cancelling affiliate programs and disabling sharing so that users can only download what they themselves upload. Others have gone as far as to ban all U.S. IP addresses.

The demise of Megaupload has undoubtedly spooked sites that are economically fueled by sharing, an unpredictable and risky business, but the file-sharing model is not dead. Rather, it will have to adapt a system that avoids copyright violations, especially monitoring dangerous Google links that lead to material owned by other parties.

And knowing the impatience of cyber crooks, as soon as the hype around SOPA dies down, we might see a Megaupload clone pop up, only to be destroyed and cause another revolution in the technicality-filled world of file-sharing.