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OpenDNS rocking $7.3 million per year on a free, but not open, service

OpenDNS is doing exceptionally well by using open-source principles, even if it doesn't use open source.

What's a fairly dull service yet manages to pull in $20,000 each day by serving up ads? No, it's not Google, but it's one of those services that make me say, "Dang! I wish I would have thought of that!"

It's OpenDNS. It's a service that speeds up browsing while protecting its users from phishing and other malware sites.

Despite the name, no, OpenDNS is not open source. It's the kind of service, however, that doesn't rely on proprietary source. OpenDNS makes money by serving up ads. More pertinently to open source, it leverages community to improve the service:

OpenDNS also uses their community to drive new features and tag new malware sites. Users submit ideas and vote on them in a Digg-like interface. And when a user blacklists a site and tags it with a category, other users are asked to verify. If they do, the site is added to the general category blacklist as well.

It's not open source, as I said, and, frankly, I'm not sure how open source would help drive this particular business. OpenDNS is a sign of our "open" times: The code is not always open, but the process increasingly is. Everyone seems to be experimenting with the principles that have made open source so successful.

OpenDNS' experiment? It's currently worth $7.3 million in revenue.