Companion service launches on Kazaa

Users of the Kazaa Media Desktop will be offered a controversial update starting Monday, with the introduction of a second file-sharing service that includes paid content.

The new component is TopSearch, which serves up additional downloadable products from the peer-to-peer Altnet Network of Brilliant Digital Entertainment Inc., in partnership with Kazaa. Access to the Altnet Network is built into Kazaa Media Desktop 1.7, an upgrade from the current 1.6.1 version. From Altnet, Kazaa users can get free promotional clips as well as pay for copy-protected music, videos, and software, says Kevin Bermeister, president of Brilliant Digital.

Later phases of the Altnet offerings will include an opt-in rewards program, through which users can earn CDs or merchandise. In exchange, users agree to contribute bandwidth and idle processing power toward a distributed computing platform. That phase is expected to launch late this summer.

Calming concerns

Brilliant Digital outraged Kazaa users in April when they became aware that its program to access the Altnet network was quietly piggybacked on Kazaa client downloads. Brilliant Digital had hoped to weld users' PCs into a new peer-to-peer network.

Bermeister says those plans were scrapped about two weeks ago because of user concerns. A PC's participation in the peer-to-peer Altnet Network will be entirely optional, he adds. However, Kazaa owner Sharman Networks does not let you opt out of installing the TopSearch technology along with the Kazaa Media Desktop 1.7.

Analysts applaud Brilliant Digital for its ingenuity and say Altnet brings a whiff of legitimacy to a file-swapping community rife with music and video pirates. However, Michael Goodman, senior analyst at the Yankee Group, questions whether consumers are ready to embrace Altnet and its business model, especially the part about linking user PCs.

"There are still too many gray areas," Goodman says of Brilliant Digital's plans. It's clearly a good deal for Brilliant Digital, he notes, but it's less clear what the user gets.

More via Kazaa

As Sharman Networks and Brilliant Digital view it, Kazaa users gain a broader selection of content. Besides having access to Kazaa's existing peer-to-peer FastTrack network, their searches for content will stretch to the secure Altnet Network.

Altnet search results will be graphically distinguished from Kazaa content, Bermeister says. They will appear at the top of the screen, and become visible more quickly than Kazaa's nonpaid user listings. Those files, some of which are protected with Microsoft's Digital Rights Management software, reside on the content owners' servers. Over time, however, the content--still copy-protected--will be downloadable from other users' PCs, just like the peer-to-peer Kazaa.

Initial TopSearch results will include a limited selection from 2K Sounds, one of EMI's independent labels. Other early offerings are video games from Infogames and material from other smaller music and video distributors, Bermeister says.

Kazaa is the first distribution partner for Altnet content, but Bermeister says TopSearch--and its access to the Altnet Network--may eventually appear through major search engines and other Internet resources.

Next: renting PCs

The second, and more controversial, phase is to invite Kazaa users to download its Digital Dashboard, which lets Altnet store media-rich ads on their PCs. Then Brilliant Digital's ad-serving network, Brilliant Banner, would dispense the ads to other users through Altnet's peer-to-peer functionality. This saves Brilliant Digital the bandwidth distribution costs of delivering ads.

For contributing their collective processing power, extra hard disk space, and bandwidth, the Digital Dashboard participants would accumulate points that are redeemable for services and products, Bermeister says. In fact, this Altnet Resource Network will seek out participants with robust PCs and fast Internet access.

Bermeister says he is working on deals with companies like United Devices, Entropia, and Parabon, which recruit PC downtime to process data for various projects, some of them charitable and many of them scientific. Typically, a PC user participant downloads a screen saver that enables the network to tap the PC's spare resources into a virtual supercomputer that can perform many more calculations than even a standard supercomputer.

Questions linger

Serious questions remain. For one thing, it's unclear whether users will be willing to pay for content they can still find free of charge on peer-to-peer networks, including Kazaa. Also, Altnet's selection of content for sale is still limited, and it's unclear whether major music labels will be willing to cut deals with a company that does business with Kazaa, which they dislike.

"It's a smart idea if you are Digital Brilliant looking for a couple million PCs to use," says analyst Goodman of the pending PC cycle-sharing program. "But it's still kind of iffy if you are a consumer."

While Sharman Networks says its network cannot be shut down, legal authorities continue to scrutinize its legality and livelihood.

On the privacy front, consumers and activists remain wary of Kazaa and Brilliant Digital after word got out of the initial bundling.

"We are all waiting very anxiously to see what is going to happen," says Fred von Lohmann, senior staff attorney for the Electronic Frontier Foundation, an online civil liberties organization.

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