PalTalk: It Was “Flattering” To Be Included In The PRISM Slidedeck

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The eyesore of a PowerPoint deck that contractor Edward Snowden had leaked had globally recognized names: Microsoft. Google. Yahoo. Facebook. Apple. AOL. Skype. YouTube. The NSA had allegedly collaborated with all of these Internet giants to request and access data on foreign users.

But then there was also PalTalk. WTF?

Even Stephen Colbert ribbed them last week. “You heard right. They’re monitoring PalTalk. Folks. You know what that means. We are that close to learning what PalTalk is….”

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PalTalk, a profitable group video chat site that’s been around for more than a decade and has about 5.5 million monthly uniques, officially says it had no idea what PRISM was until the slidedeck was published — just like every other tech company. And then added — like every other tech company — that it doesn’t let any government agency have direct access to its servers, but that it legally complies with court orders.

“First of all, it was flattering to be included in that list of the top eight tech companies in the world,” said PalTalk president Wilson Kriegel, who recently came over from Zynga and OMGPOP. “But we weren’t aware of Prism. We’re not giving backdoor access to the NSA and we comply with the law as the law states we should.”

Unlike Apple and Facebook, which have recently shared more data about the volume of requests they receive from law enforcement agencies, Kriegel said PalTalk wasn’t disclosing the number of types of requests it had received. The company’s CEO Jason Katz is a lawyer by training, however, and PalTalk works with New York-based law firm Fross Zelnick to evaluate in-bound requests.

“Zuckerberg and Sergey [Brin] have to make public statements because they have at least a billion users. Trust is a component that can erode quickly. But for us, I’m not sure if there’s anything to gain at the end of the day from sharing data like that,” said Kriegel, who added that none of PalTalk’s metrics, engagement figures and daily actives have seen any major impact from the Prism news.

Kriegel said that he hadn’t been at the company long enough to know whether PalTalk had ever disputed a government request based on its constitutionality or whether it overreached. Other companies like Twitter have been more antagonistic with federal requests for user data.

But Kriegel did share some insights into how or why the company might have held such interest for federal law enforcement. PalTalk is a video chat community that offers free group video calls and chats, with more than 20 million streams viewed per day.

Their base is split with about one-third in the Middle East, one-third in Asia and one-third in the U.S. While the majority of the company’s revenues — which come in the form of subscriptions, advertising and virtual currency purchases — flow in from the U.S. and English-speaking countries, the Middle East delivers “significantly great revenues,” Kriegel said. Apparently, they have strong numbers of paying users from countries like Saudi Arabia and the United Arab Emirates.

“The majority of our paying user base is in the U.S. and the Middle East,” he said. “If you think about these countries, not many countries in the region have wide access to credit, so we do well in very rich, oil-based economies like Saudi Arabia.”

A UN counter-terrorism report back from 2009 mentioned PalTalk as a place where Al-Qaeda-focused debate groups were held.

“The majority of all our interactions are about music, karaoke, languages, sports, politics, religion and dating,” Kriegel said. But he did say that video chat lets people get around restrictive social norms in other cultures. “If you want to interact with people in ways that aren’t always socially acceptable like with swearing, video chat might work for that.”

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