KaZaa Folds

By Robert Menta 5/22/02

KaZaa, the Dutch company created by Niklas Zennstrom who developed the FastTrack network, has announced it will shut it doors because it can no longer afford the cost of defending itself in its legal tribulations brought about by the major movie studios and record companies.

"Plaintiffs have engaged in Rambo-style litigation," complained KaZaa's legal team. They accused the media giants of using brutal court tactics to sap the company's funds, the same tactics that they used to weakened Napster and MP3.com.

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It must be pointed out here that there are two KaZaa's. Zennstrom sold the popular software client to Australia's Sharma Networks last January after the Dutch courts ruled that the company's network should be shut down. That order was reversed a few months later when a higher courts ruled that the users, not the network, were responsible for any acts of piracy. By that point Dutch KaZaa was just a shell company while Aussie KaZaa sheltered its operations from foreign court rulings by incorporating on Vanuatu, an island in the South Pacific.

In other words, KaZaa and the FastTrack network it rides upon is not disappearing. In fact the notorious inclusion of parasite-ware in the client has made the company profitable and - at least in a financial sense - the most powerful P2P network in the world.

As for Zennstrom, he got his check from the sale and now he is getting out, possibly recognizing early on that he was not up to the task of taking KaZaa to the next level as Sharman CEO Nikki Hemming has demonstrated. One can argue he is just being smart.


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