To mark the first year anniversary of police storming into the Auckland mansion and arrest of former Megaupload owner Kim Dotcom over online piracy, Mr Dotcom launched on Sunday a new portal - mega.co.nz.

The Web site, appears headed for success and could possibly replicate the success of the banned Megaupload which had 50 million visitors daily. Mr Dotcom claimed the new site had 100,000 registered users in less than one hour after he rolled it out on dawn of Sunday, and has increased to 250,000 in just few hours.

Due to the overwhelming response to the new site, users and those interested in signing up complained of the site's cyber gridlock. In a tweet, Mr Dotcom admitted the server capacity is on maximum load, but he promised that service would improve when the initial signing up frenzy is over.

He said Mega would use state-of-the art encryption to ensure only the users, and not the site administrators, know what they are uploading. This strategy, in theory, would shield the Web site from accusation of abetting online piracy, which is the charge that Mr Dotcom faced for Megaupload.

However, the Motion Picture Association of America (MPAA) said the mere use of encryption technology would not shield Mr Dotcom from liability, but reserved final judgment until it has analysed Mega. "But given Kim Dotcom's history, count us a skeptical," the MPAA said in a statement.

Mr Dotcom, 38, is a German national born as Kim Schmitz, but he changed his name to Dotcom. He is out on bail in New Zealand while U.S. authorities are seeking his extradition over various charges, including money laundering, racketeering and copyright theft. The American authorities said that Megaupload earned more than $175 million, which cost copyright owners more than $500 million, through its offer of pirated copies of movies, TV shows, music and other video content.

The raid resulted in 25 petabytes of data uploaded to Megaupload by 50 million members in legal limbo, but Mr Dotcom said he is working with lawyers and the Electronic Frontier Foundation to get access to the confiscated data and return it to users.

Besides the opening of Mega, Mr Dotcom plans to list his company on the NZX and wants to work with the people behind Pacific Fibre to break Southern Cross's cable monopoly in New Zealand. If the latter venture is successful, he promised free Internet for households in New Zealand.

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