Dotcom’s FOSS Cloud Plans

Kim Dotcom vows to again rise from the ashes with a new online storage site, this one free and open source, built on donations, and nonprofit. Funny thing is, most of us didn’t know he needed to again play Phoenix.

Back in the early days of the 21st century, Dotcom seemed to have overcome his checkered past and to have developed the Midas touch with the popular online storage site Megaupload. Like Midas, however, he was to discover that gold is an overrated commodity, the ownership of which often creates as many problems as it solves. For one thing, you can’t eat it. For another, lots of people want to take it from you.

Megaupload turned out to be an albatross that continues to curse him. In 2012, the U.S. Department of Justice brought the site down, claiming criminal copyright infringement. Dotcom, who claims innocence, has been holed up in New Zealand fighting U.S. extradition efforts ever since, and spending big bucks doing so. In January, 2013, he launched a rebranded version of the cloud storage business under the name Mega, which he claimed to be more secure due to encryption, and things seemed to be going swimmingly for him.

However, it seems that things might not have been going quite as well as some had presumed. Evidently, no news isn’t necessarily good news.

On Thursday, Slashdot published a readers’ interview with Dotcom, in which the site collected questions from its visitors which were presented to Dotcom for answers. There were, of course, plenty of questions about his recent journey into politics with the Internet Mana Party in New Zealand, as well as questions seeking his opinion on copyright laws and such.

Down near the bottom of the interview, a Slashdot reader using the moniker “Anonymous Coward” asked a question about Mega’s alleged lack of security because the platform isn’t open source: “I’ve seen some criticism from open source advocates and hackers that Mega can’t be trusted because the source isn’t available. What assurance could you give someone to the point that their files may not be kept secret while hosted on your platform?”

Dotcom’s answer crossed the line from revealing to news, and by Friday sites from The Register to Business Insider to Wired were all over it.

“I’m not involved in Mega anymore. Neither in a managing nor in a shareholder capacity. The company has suffered from a hostile takeover by a Chinese investor who is wanted in China for fraud. He used a number of straw-men and businesses to accumulate more and more Mega shares. Recently his shares have been seized by the NZ government. Which means the NZ government is in control. In addition Hollywood has seized all the Megashares in the family trust that was setup for my children. As a result of this and a number of other confidential issues I don’t trust Mega anymore. I don’t think your data is safe on Mega anymore. But my non-compete clause is running out at the end of the year and I will create a Mega competitor that is completely open source and non-profit, similar to the Wikipedia model. I want to give everyone free, unlimited and encrypted cloud storage with the help of donations from the community to keep things going.”

The “family trust” that was “seized” refers to a trust administered by Dotcom’s ex-wife that is currently frozen by court order at the request of several Hollywood studios.

As to Dotcom’s claims on the safety of data stored on Mega, Wired is reporting that Dotcom has promised to supply more information this week and tweeted on Friday: “I will issue a detailed statement about the status of #Mega next week. Then you can make an educated decision if you still want to use it.”

What all this means is anybody’s guess. There’s little doubt that dealmeister Dotcom will put some some cash together and we’ll see yet another Dotcom owned online storage site, just as there is little doubt he’ll continue to be forced to spend money defending himself against the U.S. DOJ’s attempts to make him the scapegoat for the movie makers’ and the record industry’s troubled business models. The fact that he says he’s going open source is good, but how much does FOSS matter in a cloud environment where control of the software resides solely with a site’s administrators?

One thing is absolutely certain, however: This will be a most entertaining story as it develops.

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