paidContent - How Things Played Out For Some Other File-Sharing Firms That Were Bought
This story was written by Joseph Tartakoff.
If the stories of other file-sharing firms that sold out are any indication, Pirate Bay’s move to sell itself and go legit might not play out so well. Here’s what happened to some of its peer-to-peer predecessors that were put up for sale:
Company: Scour
Buyer: CenterSpan
Sale Price: $9 million
Commentary: Michael Ovitz, along with Ron Burkle’s Yucaipa Companies purchased a controlling stake in Scour—then a broadband search site—in 1999. Subsequently, the company developed its peer-to-peer file sharing service as a way to keep up with Napster (NSDQ: NAPS). But it was promptly sued and went bankrupt. Its assets were purchased by gaming technology company CenterSpan for $9 million in December 2000. CenterSpan then relaunched Scour as a legal service. The effort failed to take off and within three years CenterSpan had laid off most of its employees.
Company: Kazaa
Buyer: Sharman Networks
Sale Price: Not disclosed
Commentary: Sharman Networks purchased Kazaa in 2001 shortly after Kazaa’s legal troubles started to really heat up. The sale to the secretive Australian company which had been incorporated only days earlier did not however stop the legal fighting. In 2006, Sharman agreed to pay more than $100 million to settle all of its outstanding legal disputes, saying it would work “together with the content providers to the benefit of consumers, businesses, and artists.”
Company: Napster
Buyer: Roxio
Sale Price: $5 million
Commentary: German media giant Bertelsmann—which had already pumped millions into Napster—agreed to purchase the company in May 2002 for only $8 million, but the deal eventually fell through as did another with adult entertainment company Private Media Group. Software company Roxio ultimately bought the company in November 2002 for around $2 million. Renamed Napster and relaunched as a paid music service, Roxio was sold to Best Buy last fall for $121 million.
ompany: Pirate Bay
Buyer: Global Gaming Factory X
Sale Price: $7.8 million
Commentary: Pirate Bay’s new owner—which distributes ads across internet cafes around the world—says it will start compensating copyright owners for material its users find and download. The deal hasn’t actually closed, however. It’s subject to the firm raising the funding.
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By Joseph Tartakoff