Freedom Is AnchorFree’s Business, and Business Is Good

December 12, 2011 Updated: April 8, 2013

 There are 600 million Internet users living in countries where the Web is censored. When David Gorodyansky heard this, he saw 600 million potential customers.

Gorodyansky is the CEO and co-founder of AnchorFree, which runs the HotSpot Shield tool that secures user Internet activity, hides users’ identity, and grants access to parts of the Web that may be blocked or censored. His company recently released an app version of the service for the iPhone, iPad, and iPod Touch.

“It would be great if human rights and freedom were looked at as an opportunity—not as a charity,” Gorodyansky said, adding “It’s just supply and demand. There’s demand for human rights. There’s demand for freedom.”

The service works through a VPN tunnel, where the user connects to servers run by AnchorFree, which then encrypts their data as they browse the Web. This grants every Web page the user visits the same level of security as their banking websites, turning HTTP connections into HTTPS.

The service also takes users’ IP address—their online fingerprint—throws it out, and assigns them a new one. This makes it so that the user cannot be tracked by their IP.

 The company also doesn’t store data on the user, which has been an area of controversy among other VPN services—since if someone demands the information, offers to pay for it, or breaches their systems and takes the data, then the user is placed at risk.

“We do not store the IP address on a user,” Gorodyansky said. “So if someone came to us and offered $10 billion and they just wanted one IP address, or had a subpoena, we simply don’t have it. So even if we really want to, we don’t have it.”

“We build this technology in a way so we protect the user from the bad guys, the good guys, and even ourselves,” he said, noting that if a law comes out saying they have to store this data in the U.S., they’ll have to abide, “but at this point that doesn’t exist.”

Offering a channel that undermines censorship from oppressive regimes has brought them some pressure abroad, but the company has always found a way around it.

Gorodyansky said the Chinese regime blocked their website in China, but this ended up backfiring. After the website was blocked, Gorodyansky set up an automated e-mail service sending HotSpot Shield to Chinese users.

“So they censored our website and our traffic quadrupled in China,” Gorodyansky said.

Their main markets for Internet freedom are mainly in Asia and the Middle East. Yet they also have large markets in the U.S. and Europe for users who want privacy.

While Gorodyansky’s work brings free access to the Web in places where such freedom doesn’t exist, he found a way to make this profitable.

HotSpot Shield gets 10 million unique visitors a month, and his service encrypts more than 2 billion pages a month. They take up as much bandwidth as eBay. In addition to marketing to the 600 million Internet users in countries where the Web is censored, they’re also trying to bring in the 800 million people who use security software.

The service is free, but is paid for by an ad placed at the top of the user’s Web browser while using the service. They also have a paid package that removes ads, increases speed, and offers other services, for around $14.89 a year.

 The new iOS version works on a monthly service—either 99 cents a month, or $9.99 a year.

“We wanted to make it so cheap that it’s almost free, so that everyone can use it,” Gorodyansky said.