Kazaa to become legal download service

— 11:33 AM on July 27, 2006

After a number of legal battles and an Australian court order that eventually barred the Kazaa peer-to-peer file sharing software from users in Australia, Sharman Networks—the company behind Kazaa—has agreed to pay $100 million in damages to the record industry. In addition to the settlement, Sharman also plans to turn Kazaa into a legal content download service:

"It has been our long standing goal for Kazaa to play a significant role in the growing market for licensed online distribution and authorised exchange of copyrighted content using peer-to-peer technology, and this settlement ensures that we will be working together with the content providers to the benefit of consumers, businesses and artists," said [Nikki Hemming, CEO of Sharman Networks].
Kazaa will be loosely following in the footsteps of Napster, which also began as a largely illegal file sharing network before being shut down, going bankrupt, and finally being re-introduced by Roxio as a legal music download service. With Kazaa, however, Sharman wants to "make [peer-to-peer] an integral part of the future of online digital entertainment," which suggests a strategy different from that of Napster and iTunes.
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