Thursday, April 21, 2011

Interview with internet millionaire

My recent friend had a fast found riches that is now in shables and I wondered all these questions (how, why, when etc) about it, after spending some time asking various things I got an interesting picture and maybe some of the readers will find it interesting.

Male in mid twenties now, dropped out of high school at 16 and became a quick millionaire for a few years [update: he was making only about 100k per year for at least 4 years - never really reaching a million in total but living it up by spending as you will find out], but after the expensive lifestyle the business died (you will find out why below) and now is just a normal guy with interesting story and a few expensive toys (which he has trouble paying for now).

The business was internet website(s) that focus on satellite hacking. Got started by being a vendor of satellite hardware (receiver and/or satellite).

For those unfamiliar (like me) here's how it works: In order to get the satellite service you would need to pay a monthly subscription (along with the hardware cost of the satellite itself and receiver box that connects to your TV), but hacking it became very simple (he described it as easy as sending an email) to circumvent the monthly subscription cost and simply get a free signal.

Bottom line, if you can hack the satellite you can get it for the cost of the hardware itself and there is no need for monthly subscription. The hacking would sometimes have to happen quite often as the system would change things roughly every month, so the users have to come back every month. The business worked on the principle of the traffic of visitors - displaying third party advertising and sponsorships that work with the site directly (find out more from the interview below). Another stream was premium users would pay a smaller fee then monthly cost of satellite subscription and get the hacks faster than regular users which got a delay to create this new stream of revenue (smart).

Back to the story, from the vendor website (selling hardware) he made good but not great money, when a satellite company bought one of the top satellite hacking forums (let's call it X forum) there was another top satellite hacking forum up for sale (lets call it Y forum). Since the X forum seemed to have a bias as it's owned by a satellite company he decided to buy Y forum for the asking price of about 10 thousand dollars cash.

He made several changes to allow for more topics and was able to get the major moderators on board to Y forum from the X forum. When X forum started censoring the topics, discussions and even the spelling name of Y  forum. The moderators, top contributers and hackers switched fully to Y forum and of course the regular users followed there to make Y forum a huge success.

Now that the story seems clearer (I hope) here's some more details that I asked him and I formated it into and interview format and paraphrased the answers to make an read:

How did you get started in the website/satellite business?
A high school friend introduced me to satellite hacking (direcTV and free to air), got really obsessed with the stuff, spent days studying it and learned everything about it.

When did you start?
The satellite idea around 2004 and the website in late 2005-2006, made the most around 2007-2008
In late 2008-2009 the hacking was stopped because of the huge investments (millions) the satellite companies spent on security of the system, after that the traffic stopped.

Where did the traffic come from?
Visits mostly North America (USA and Canada). The hacks probably come from South Korea or somewhere in Asia.

How much did the advertising pay?
Thousands from private ads (sponsors) for satellite equipment and thousands more from third party (adbrite, since adsense was running but never paid - it shutdown saying there were invalid clicks) every month.

Where was it hosted?

How much was the hosting?

Was there other forms of revenue?
Yes, premium accounts that got the hacks faster were paid for by some users, there were also many donations received.

What technology/programming language did it use?
vbulletin - php/mysql forum (not free or open source)

My understanding is the business was run from Hong Kong and funneled the money back through a local one. The expensive lifestyle is not one I would choose with this income but it makes for an interesting story. Leasing an 05/06 Dodge Viper that he still hopes to pay off among other toys, stories and things that shell remain anonymous.

If you have any questions you would like me to ask/answer please leave in the comment or email theborisedu at gmail dot com

Let me know what you think!

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