Hotspot Shield: Destroyer of Google, Yahoo and NBC?

Invisible Cloak for Web Surfers Rapidly Adding Users

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NEW YORK (AdAge.com) -- Consider, for a moment, what would happen if the identities, geographies and surfing histories of a large number of internet users suddenly became invisible.

Yahoo and Google would not be able to target them with advertising based on demographics or behavior. Hulu would have a hard time blocking people from outside the U.S. from watching "30 Rock." The International Olympic Committee would not be able to sell different web rights in different countries. China wouldn't be able to censor YouTube.

In short, much of the infrastructure of online advertising and international TV syndication -- let alone the ability of authoritarian regimes to control the web -- would break down.

Millions of global users
It's already happening on a not-insignificant scale. Hotspot Shield, a free ad-supported "virtual private network," has 5.5 million global users, up from 1 million a year ago. About 4 million of those users are outside the U.S., including quite a few American expats who want to use YouTube, as well users of Google, Skype and Facebook in countries that censor those services.

Most of the traffic comes from regions where Google and other sites are censored. About 4 million unique users use the software to access Google, 800,000 use it to surf YouTube, and about half a million use it to access Facebook. About 125,000 people a month use it to watch shows on Hulu, adding urgency to the site's effort to secure international rights for TV programming.

Diane Yu, chief technology officer of ad management firm FreeWheel, manages a technical staff in Beijing, and said she routinely uses Hotspot Shield to view video sites (often her clients') that sit behind the Chinese government's firewall.

"This is pretty widely used," she said. "For a long time Wikipedia was blocked in China. ... I see a younger generation of educated people using it when they need to get research information."

Helpful videos that show how to use Hotspot Shield abound, including this one on YouTube that shows how to watch Hulu in the U.K.

Forces behind application's growth
Given the size of these sites, the numbers aren't particularly material, but consider for a moment that the forces behind Hotspot Shield's 500% annual growth -- censorship, geo-blocking of websites, invasive behavioral targeting -- are becoming more and not less of an annoyance. Meanwhile, web users have come to expect the content when and where they want it.

Ironically, this destroyer of ad models has its own ad model. The Silicon Valley-based software firm AnchorFree, which makes Hotspot Shield, supports the service by selling advertising against its users, which over-index as travelers who want security in airports and hotels and high-income expats.

Once the "shield" is turned on, an ad appears at the top of the browser, but it can be collapsed. Because they become anonymous, users are given the option of choosing from categories of advertising in which they're interested before they begin. Sponsors have included Sprint and Royal Caribbean.

In the U.S., Hotspot Shield is handy for those concerned about security of public Wi-Fi networks; those who want added encryption for financial transactions; and, well, those who just don't like being tracked by Yahoo, Google, their ISPs, or anyone else. "Our goal is to give users complete ownership of their own data online and take it away from the big corporate servers where it is stored now," CEO David Gorodyansky said.

Hiding browsing history
Web browsers such as Apple's Safari and Google's Chrome have private modes that make it easy to keep your browsing history a secret, and savvy web surfers can manually delete their cookies, though there is considerable debate on how many bother to do so.

But deleting cookies won't stop a browser from showing its IP address, along with its geography and other demographic information. Hotspot Shield assigns a new IP address for each session. To Google, or any other site, the session appears as a U.S. visitor from AnchorFree. Mr. Gorodyansky said the company has "fairly complex and very robust" technology to keep a site from just simply blocking all AnchorFree traffic.

Hotspot Shield has a small subset of users today, but not hard to imagine that growing to become a significant percentage of the world's internet audience, especially as consumers come to expect access to content wherever they are, or if advertisers push the boundaries on privacy and targeting.

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