KaZaa Sold, May Go Down Under.

By Richard Menta - 01/21/02

The Dutch file trading company KaZaa may be moving on to safer shores. Today the company announced that it has been sold to Sharman Networks Limited, a privately held firm in Australia.

The terms of the sale were not released. Neither was any information regarding the possible movement of the company out of the Netherlands and away from a court decision last December that ordered the company to shut down its service.


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"We are thrilled at our opportunity to resume the KaZaA service and further develop the KaZaA brand,'' stated Sharman CEO Nikki Hemming. "We value the millions of users of KaZaA's software and will continue to enhance and grow our core offerings."

Prior to the sale, KaZaa did not halt the trading of files. Instead the company chose to ignore the court's ruling, claiming that as a non-centralized service it couldn't once the program was in the hands of users. Last week the company did stop the ability to download the program itself, but those who already had it were freely able to search and download files. With the sale, the company has again made the program available for download and continued its defiance of the court order.

With the Dutch court decision and the lawsuit from the American music and movie industries, one has to wonder why Hemming and Sharman Networks chose to risk the purchase of company under such legal turmoil. One strong possibility is that they plan to move the company to another country whose laws would offer it a safe haven.

DotCom Scoop is reporting that Australia itself will become new host country for the company. The new terms of agreement for KaZaa seem to confirm this: "This License as well as all disputes arising out of or in connection with this Agreement shall be governed by the laws of the New South Wales, without regard to or application of choice of law rules or principles. Any dispute arising out of or in connection with this License, or in future agreements resulting there from, shall be exclusively resolved before the competent court in New South Wales," the new terms of use dictate".

If Sharma Networks is successful in blunting KaZaa's legal tribulations, the prize is not only a service with a large and loyal audience, but one that already turns a profit. They also seem to already have some direction for the service in mind. One of the first acts Sharma Networks undertook as new owner was to announce that a subscription version of the client will be developed.

"Certain features of the KaZaA Media Desktop may require payment in the future including a prepaid fee ("Prepaid Fee"). The Prepaid Fee, and all taxes and other fees related thereto will be paid by you in advance. You shall pay all fees and charges incurred through your account at the rates in effect for the billing period in which such fees and charges are incurred. All fees and charges shall be billed to you, and you shall be solely responsible for their payment. You shall pay all applicable taxes relating to the use of the Software through your account. If you do not pay the applicable fees, including Prepaid Fees, within the prescribed period of time your account will be terminated immediately, without limiting KaZaA's right to demand payment of fees and damages at a later time"

KaZaA was founded by 35-year-old Niklas Zennstrom, who developed the FastTrack network KaZaa rides upon. Included in the sale are the Web site, the KaZaA name and logo, as well as a license for FastTrack. FastTrack itself, which also powers Morpheus and Grokster, was not included in the sale.

 

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