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February 21, 2013

Kim Dotcom's Mega Going Back to School, Offering a White Label Service

By Steve Anderson, Contributing TMCnet Writer

While the jury is still out, in many sectors, over Mega's overall impact on the Internet as we know it, and whether or not this is just a new haven for media piracy, the point is that it's catching on. Sufficiently so that founder Kim Dotcom took to Twitter (News - Alert) to make an announcement that, in the near-term future, Mega would be available on a white label version basis. Moreover, he made further remarks stating that universities would be able to get in on this service at no charge.

In a typical "white label" setting, a product or service is offered in such a fashion as to make it possible for other companies to promote it, sell it, and slap their own brand name on it as though those companies were the ones who came up with it in the first place. How this relates to Mega is somewhat unclear--Dotcom wasn't putting out a whole lot of details--but Dotcom did manage to provide some interesting general information about the idea.

Mega has been, according to Dotcom, already approached by at least one major United States university interested in the service, and Mega in turn believed that the best solution for said university was "a tailored solution." This came not too long after the discovery that Dotcom's site proved surprisingly popular with college students, and that Mega's collaboration features were proving to be highly popular in their own right, with many students expressing the belief that they "can't wait for our (Mega's) messaging to go live."

Mega, realizing it was dealing with current free users that might well be future paying customers who find new uses for Mega's offerings when those college students become small business owners and the like, figured that now might be a good time to get its foot in the door and establish itself as the college student's Dropbox (News - Alert) equivalent, making it a major force in a few years. This is actually said to be similar to what Google and Microsoft do, offering their products up at no or very low charge for students, and then ratcheting up the bill when they get real-world jobs and make real-world money.

But given that Mega has already passed the three million user--and 125 million file--mark after just a month of being available in the first place, it poses an interesting point overall. Offering a white label version of Mega with Mega still being something of an unknown brand could serve to dilute the brand well past acceptable levels. There's also nothing saying that free users will turn into paying users without a significant contribution to a value proposition. Still, Mega has done in a month what many Web companies wish they could do in a year, so brand dilution may not be long on Mega's thought processes right now.

Still, the point remains. Mega is planning to go to white label at some point and its business model is clearly a long-term strategy. Whether this approach will work or not ultimately remains to be seen, but it's still going to be worth watching to find out just how far it goes.

Edited by Brooke Neuman
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