360° Coverage : Online Anonymity For The Business Pro, The Rebel And Everyone In...

2 Updates
Online Anonymity For The Business Pro, The Rebel And Everyone In Between

Online Anonymity For The Business Pro, The Rebel And Everyone In Between

Jan 22 2014, 5:46am CST | by

You wouldn’t know it from its modest adobe-and-brick-tile headquarters on National Avenue, but like a lot of its larger neighbors in Mountain View, Calif., AnchorFree aims to change the world. Not...

Filed under: news

 
 
 

31 weeks ago

Online Anonymity For The Business Pro, The Rebel And Everyone In Between

Jan 22 2014, 5:46am CST | by

You wouldn’t know it from its modest adobe-and-brick-tile headquarters on National Avenue, but like a lot of its larger neighbors in Mountain View, Calif., AnchorFree aims to change the world. Not by becoming the biggest search engine (and advertising machine) or the most prodigious professional network on the planet but by letting you browse the Internet anonymously–protecting you from the prying eyes of malicious hackers, governments bent on stealing your private data or even your everyday snoop by offering so-called activity encryption for anyone who accesses the Web. “Just like an antivirus protects your computer, we protect everything you do online,” says David Gorod?yansky, the 31-year-old cofounder and CEO. “We wanted to make the world a better place.”

Making the world a better place can be a pretty good business. AnchorFree has been buoyed by dissident movements in the Middle East, Thailand and Turkey. But it’s also gained fans in the U.S., with heightened concerns about intrusions by relentless data gatherers, from the NSA to Google and Facebook. The company’s virtual private network app, Hotspot Shield, has been downloaded 200 million times since late 2007; another 250,000 people sign up every day. With net margins of 30%, AnchorFree pulled in revenue of $35 million last year, up from $25 million in 2012. Half comes from almost nonstop pop-up ads and paid content; the rest from a sliver of its 25 million monthly subscribers who pay $30 a year for its Elite (ad-free and faster) service.

It took a while for Gorodyansky and cofounder Eugene Malobrodsky, also 31, to find their focus. Both the children of computer engineers who immigrated to Silicon Valley as the Soviet Union crumbled, the two met at their Palo Alto synagogue 18 years ago and have remained inseparable. Gorod?yansky, an intense, fast-talking Muscovite, and Malobrodsky, a laid-back techie born in Lithuania, founded their first venture in 2002: Intelligent Buying, a network-equipment sales platform that reached $1 million in revenue.

The duo aimed higher. While keeping the business and their college courses going, they met in coffee shops–and groused. “This paid Wi-Fi stuff has to die,” Gorodyansky recalls thinking. “It has to be free, and it has to be secure.” Why not provide such a service–and get advertisers to pay for visibility on their network, covering infrastructure costs and leaving a little profit? AnchorFree lumbered into the world in 2005.

In classic entrepreneurial form, they maxed out their credit cards, spending $50,000 or so to finance Wi-Fi antennas in downtown Palo Alto and San Francisco. The ploy snagged a few thousand users and caught the attention of then San Francisco mayor Gavin Newsom, who invited Gorodyansky to advise his tech council, which included Craigslist founder Craig Newmark and Google folks. Through their lawyers, Wilson Sonsini, which took its fees in equity, the founders met former MCI Communications CEO Bert Roberts, who convinced RENN Capital of Dallas to lead a $6 million Series A round in 2006.

Great idea, but little money in it. “The cost of upkeep and infrastructure just doesn’t generate enough revenue to pay for itself,” explains Malobrodsky. “So we started thinking about what kinds of products would.”

AnchorFree jettisoned everything except Hotspot Shield. Here’s how it works. When you download and activate the program on desktop, tablet or mobile, you visit websites via the company’s servers in the U.S., the Netherlands, Germany, Switzerland and Japan, which scrub any information (including IP addresses) that could determine your location or identity. After you log off, your data are deleted. The free download caught fire. “We had to add servers literally every two days because it would get oversaturated,” Malobrodsky recalls.

The slimmed-down company rises in popularity whenever repressive regimes crack down. In 2010, after Chinese authorities blocked the site, AnchorFree figured out a bypass: It sent e-mails to its entire user base with links to download Mac and Windows versions of Hotspot Shield; because Web surfers rode Gorodyansky’s servers, they steered clear of the censors. “That helped us quadruple traffic,” he says.

During the 2011 Arab Spring, when governments shut down websites like Facebook, YouTube and Twitter, protesters flocked to Hotspot Shield. That January, as crowds in Tahrir Square tried to oust Egyptian president Hosni Mubarak, Hotspot Shield downloads there jumped literally tenfold overnight to 1 million. “We were the only way to get to social media, to communicate and to share,” says Gorodyansky. Last year, when Turkish Prime Minister Recep Tayyip Erdogan threatened to raze a park in Istanbul, thousands of people discovered the AnchorFree loophole, boosting usage 1,000% nationwide.

You might think the two ex-Soviet founders had been inspired by legendary dissidents Andrei Sakharov and Natan Sharansky. Gorodyansky, a onetime Forbes.com contributor, shakes his head. “We pretty much grew up here.” He points to his paternal grandfather, Aaron Leonid, a Red Army reconnaissance photographer in World War II, who used to tell him, “Don’t just stop because there’s a wall or a door in front of you. Keep going!” The Arab Spring uprisings, however disappointingly they turned out, clarified AnchorFree’s mission. Says Gorodyansky: “We wanted to be a business with a soul and a real social mission, instead of just a financial one.”

Making dough sometimes clashes with that higher goal. Hassle-free communication and browsing come with a price–a relentless barrage of ads that follow you like black flies wherever you go on the Web. Some are content teases by publishers; AnchorFree distributes content for the likes of AP, UPI, PC World, Mac World, National Geographic and News Distribution Network, which pay for the service. Many ads are annoying and random–getting hit with an ad for a dating service, say, when you’re visiting a musical instrument site, served by an ad network from Google, Yahoo or AOL. Says Gorodyansky: If you don’t like the ads, pay for the Elite service.

But the app can be a challenge for some advertisers, too. Because AnchorFree doesn’t collect an individual’s data and deletes everything except page cookies, brand advertisers glean only the most minimal information about potential customers. They know you’ve come to a site via the app and hope they’re hitting you with something you’ll click on.

AnchorFree may have to reconcile its competing interests at some point. In three rounds of financing it has raised $63 million. Its biggest backer is Goldman Sachs, which led a $52 million Series C round in May 2012, giving AnchorFree a valuation of $250 million. (Goldman declined to comment on its investment.) Half that wad went to pay off some early investors and staffers. Roughly one-third of the equity is still in the hands of the founders and their 70 employees.

Bert Roberts, the onetime MCI chief who owns more than 10% of AnchorFree, is letting his money ride a while. There may be an acquisition of a company or two that develop security and identity management apps for mobile. AnchorFree is also beta testing a portal called KaboomIt.com that lets users express themselves and share information, pictures and videos before disappearing them, ? la Snapchat. Roberts talks about achieving a user base on a par with some of those other Valley titans trying to change the world. AnchorFree, he insists, “has that kind of potential.”

Follow me on Twitter @KarstenStrauss

10 Incredibly Simple Things You Can Do To Protect Your Privacy

Source: Forbes Business

 
Update
2

3 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workf ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

4 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and MH17 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Experiential purchases more satisfying than material ones
New York, Sep 2 (IANS) Spending money doing things or buying experiences makes people feel a lot more happier than spending money on material things, a study says.
 
 
Eat fruits daily for healthy heart
London, Sep 2 (IANS) Daily fruit consumption cuts the overall risk of death by 32 percent and cardio-vascular diseases (CVDs) by up to 40 percent, a study shows.
 
 
NASA building traffic control system for drones
New York, Sep 2 (IANS) NASA is developing a drone traffic management programme that would work as a separate air traffic control system for drones flying low to the ground at 400 to 500 feet.
 
 
App that enhances smartphone battery life
New York, Sep 2 (IANS) Are you frustrated by the limited battery life of your smartphone? No need to fret any longer as a US professor has created a free app called Estar that reveals how certain apps drain a smartphone battery faster.
 
 
 

Latest from the Network

Eight policemen killed in Egypt explosion
Cairo, Sep 2 (IANS) At least eight policemen were killed and four injured Tuesday in an explosion in Egypt's Sinai region, a security official said. The blast occurred when a police vehicle went over a planted...
Read more on Politics Balla
 
Coach Orenga content with Spain's basketball World Cup performance
Madrid, Sep 2 (IANS) Spanish basketball coach Juan Antonio Orenga said he was happy with his team's performance in the FIBA World Cup till date and was all praise for veteran Pau Gasol, who has been a star for the team...
Read more on Sport Balla
 
Hateful content on Facebook bad for your brain
London, Sep 2 (IANS) Are you exposed to reading homophobic, racist, misogynistic or other hateful content on Facebook? It may have a harmful effect on your brain in the long run. According to a recent Italian study,...
Read more on Celebrity Balla
 
Two policemen killed in Afghan suicide attack
Kabul, Sep 2 (IANS) At least two policemen were killed and two others injured Tuesday in a suicide car bomb attack in Afghanistan's Nangarhar province, an official said. "The attack took place in Ghani Khil district...
Read more on Politics Balla
 
Rihanna pays £6k for nail technician
Rihanna has paid £6,000 for a manicure. The 'Rude Boy' singer, who is currently enjoying some time off from her busy schedule on her luxury yacht in the Mediterranean, flew out A-list nail technician Jenny Longworth to...
Read more on Celebrity Balla
 
Kelly Brook: Simon Cowell thought I was a singer
Kelly Brook says Simon Cowell didn't know who she was when she was asked to appear on 'Britain's Got Talent'. The 34-year-old beauty starred as judge on the show in 2009, before she was unceremoniously dumped by the '...
Read more on Celebrity Balla
 
Cee Lo Green tweets controversial rape views
Cee Lo Green has deleted his Twitter account after allegedly tweeting some controversial views on rape. According to an article on BuzzFeed, the 39-year-old singer posted several comments about the subject on his...
Read more on Celebrity Balla
 
Ariana Grande hits out at nude photo leak
Ariana Grande insists reported nude pictures of her are fake - because her bottom is ''a lot cuter'' in real life. The 'Problem' hitmaker took to her Twitter account this morning (02.09.14) to address rumors that a...
Read more on Celebrity Balla
 
Ryan Fletcher opens up about Ashley Roberts romance
Lawson's Ryan Fletcher has opened up about his romance with Ashley Roberts. The bassist has confirmed that he's dating the former Pussycat Dolls singer - who was previously romantically linked with TV presenter Declan...
Read more on Celebrity Balla
 
Kanye West avoided dress disaster before wedding
Kanye West avoided a bridesmaid disaster before his wedding to Kim Kardashian. The rapper became a hero before he had even tied the knot with the brunette beauty at their May nuptials when he stepped in at the last...
Read more on Celebrity Balla