

The Mega-Money World Of MegaUpload - Uncle_Sam
http://torrentfreak.com/the-mega-money-world-of-megaupload-100606/

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SkyMarshal
>His [false] declaration led to the biggest single-day rise on the German
stock market which allowed Schmitz to sell his shares and pocket $1.5 million
profit. He was arrested for insider-trading in 2002, sentenced to a term of 20
months and given a 100,000 euro fine.

Why does the law allow people to keep almost all of their ill-gotten gains?
Prison sucks, yes, but a white-collar prison and token fine do not appear to
be enough disincentive. Crooks do the time, then walk out rich.

~~~
rue
I have always assumed that they are required to return any funds gained
through a criminal act as sort of a "goes without saying" thing and only the
_additional_ fine is mentioned.

I suppose I could be wrong, though, depending on the country?

Or perhaps you are just lamenting that the fine is too small relative to the
person's remaining fortune outside that, presumably gained by legal means?

~~~
SkyMarshal
I don't know, maybe they are, it just seems that every time I hear of these
cases, only the jail time and fine are mentioned, but never the confiscation
of the ill-gotten gains. I hope you're right.

------
tigerthink
"In 2001 Schmitz pulled off a huge stock market bluff which netted him a small
fortune. After buying shares worth hundreds of thousands of dollars in the
almost bankrupt LetsBuyIt.com, he announced that he would invest 50 million
euros in the company, but in reality he didn’t have the money. His declaration
led to the biggest single-day rise on the German stock market which allowed
Schmitz to sell his shares and pocket $1.5 million profit. He was arrested for
insider-trading in 2002, sentenced to a term of 20 months and given a 100,000
euro fine."

And they let him keep the money? Damn, I should try insider trading some
time--$1.4 million is pretty good for 20 months of "work".

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naz
I want to hear more about the site and how it makes money and less about the
man. The title could easily be "The mega-money world of Megaupload founder"

~~~
barredo
I'll try to summarize:

First, their traffic:
[http://trends.google.com/websites?q=megaupload.com,rapidshar...](http://trends.google.com/websites?q=megaupload.com,rapidshare.com,digg.com,nytimes.com&geo=all&date=all&sort=0)
(compared with Digg & NYtimes.com)

You can upload files to these sites, there are limits, but generally are
avoided by splitting large files with RAR and such. Although, premium/pro
users get larger limits and can upload more content.

Then there are the people who download. Everytime you go you get a prompt
similar to: are you a free or premium/pro user? if you are a paid user, you
get to download files directly (with a cookie), but if you don't you get a
interstitial with a countdown for several seconds (30-70 usually) and a lot of
ads, and then, a link to direct download appears.

The pricing goes like this:

Megaupload (<http://megaupload.com/?c=premium>) 9.99€ for 1 month, 19.99€ for
3 months, 59.99€ for 1 year, 79.99€ for 2 years and 299.99€ for life.

Rapidshare (<http://rapidshare.com/premium.html>) 6.99€ for 30 days, 16.99€
for 90 days, 29.99€ for 180 days and 54.99 for 365 days.

Then, the use:

I don't know in the US, but in Spain, Latin America and France these services
are HUGE, and there are a LOT of them, like mushrooms in autumn. There are
forums where people interchange links with copyrighted material everywhere,
with huge traffic stats.

In France the boom came when French Gov started pursuing P2P, almost instantly
everyone I knew started paying for these kind of services to get direct
download (and the service is quite fast) of movies, tvshows and whatnot.

~~~
slig
With rapidshare, the person who uploaded the file gets 1 point each time the
file he uploaded is download by a free user. Later, he can trade points for
new premium accounts, that lasts for a 1 month, that he can sells directly to
3rd part using paypal for a lower price that rapidshare.

That way, there's a huge incentive for uploaders to use rapidshare and promote
their own uploaded files.

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rjett
Megaupload, for the uninitiated, allows one to download or stream via
megavideo all sorts of pirated material. I know that when you stream the
video, the player will stop after 72 minutes and the user is prompted to pay
for megavideo premium service or wait 54 minutes until they can view more
content.

Here's a question I've always had: Since most of the material on the site is
pirated, can megavideo still legitimately charge for access to their content?
Or a more interesting question, does paying for this content confer upon the
user the right to view this copyrighted material?

~~~
dangrossman
Megavideo can charge you to use their site. That they may be infringing upon
copyrights is a separate matter.

There is no right to view copyrighted material. Copyright provides an author
with monopoly over the rights to copy, distribute and make derivative works.
Viewing is not copying, distributing or making derivative works (in the case
of streaming).

It's MegaUpload that needs permission from the copyright holder to copy and
distribute the work. Even if MegaUpload somehow automatically paid the
copyright holders every time someone paid them to view something, it'd still
be illegal.

~~~
Raphael
>Viewing is not copying

The site sends you the bits. There's nothing stopping you from caching what
you receive.

~~~
baddox
Then the maintainers of all the public and private routers between you and the
host are also committing copyright infringement by caching the bits long
enough to route them.

~~~
roel_v
They _are_ /copying/, but they are not _infringing_ because these "technical
necessities" (exact wording depends on legislation) are in most IP protection
laws excluded from being infringements.

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zmmz
The article forgot to mention his most hilarious stunt, where he claimed to
have found a foolproof money making algorithm:
[http://www.theregister.co.uk/2003/04/10/hoaxster_hacker_disc...](http://www.theregister.co.uk/2003/04/10/hoaxster_hacker_discovers_infinitewealth_algorithm/)

The original website is long gone, but strangely there is a copy lying around
here (the name is a combination of the word "trend" and the German DAX Index):
<http://www.nulinegraphics.com/temp/trendax/index.html>

A few years ago Kimble and his entire "kimpire" disappeared off the net, save
for MegaUpload. I am 99% certain that it is his project since he announced so
a while ago at a auto forum (but you never know when he is lying :D):

[http://www.m5board.com/vbulletin/gumball-3000-forum/54147-we...](http://www.m5board.com/vbulletin/gumball-3000-forum/54147-we-
host-all-your-gumball-content.html)

~~~
bravura
What revenue stream(s) is the source of his fortune?

~~~
mahmud
Millions of horny and bored people?

------
antidaily
I remember this guy from his over-the-top website: [http://www.linux-
user.de/ausgabe/2001/03/035-plugins/flash.p...](http://www.linux-
user.de/ausgabe/2001/03/035-plugins/flash.png)

------
tigerthink
Does anyone know what kind of money MegaUpload makes?

How profitable are internet businesses in general? Would anyone be willing to
share the site they run and the amount it makes?

