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E-clips technology news: Caught napping?

NAPSTER is to be mopped up by music giant Bertelsmann for around pounds 5.7m. Bertelsmann gets all the assets - the name, the Peer-2Peer software and it pays off the creditors - but it sidesteps the liabilities, most notably, other shareholders, and the millions demanded by most of the music majors who have been pursuing Napster though the American courts. The price is a lot less than had previously been mooted in March/April when Bertelsmann made its first attempt to buy Napster. Then, the company was understood to be prepared to pay up to pounds 30m.

Only last week, Bertelsmann offered pounds 12m - which probably means that Napster was very, very close to collapsing. The buyout almost certainly saves Napster from bankruptcy. As a business which is all brand, no traffic, no revenues and potentially huge costs, Napster never had much room for manoeuvre. It was, however, quite a phenomenon in its day, like Hotmail or ICQ or, on a lesser scale, the UK's Friends Reunited, growing from zero to mil-lions of users in nanoseconds. People like getting things for free, and they loved Napster.There was a real community of likeminded people who turned to Napster, which was so much better than rival services - largely because it worked and the others didn't.

Unfortunately, the Napster phenomenon - swapping music over the internet with fellow Napster travellers - was piracy, and a branded business built on piracy has little breathing room.

Napster would have been so much stronger if it had never been a business, if its developers had made a true P2P architecture which dispensed with central servers - if it simply hadn't got itself quite so involved.

But the team smelled money. Nothing wrong with that - but piracy and above-board capitalism are difficult to square.
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Copyright 2002 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Features
Publication:Daily Post (Liverpool, England)
Date:May 22, 2002
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