Entertainment Firms Target Gnutella

The entertainment industry, which finally appears to be getting its way in the Napster case, is now going after a new and more elusive online target: the Gnutella file-sharing system, Friday’s Wall Street Journal reported.

In recent weeks, Napster Inc., of Redwood City, Calif., has installed increasingly effective systems for keeping copyrighted music off its site, to the point where once widely available songs are unavailable and where Napster usage is, as a result, plummeting. A study by research group Webnoize, Cambridge, Mass., found that the number of daily Napster music downloads has dropped by 40% since February.

A Napster spokeswoman said that even with the decline, more than eight million people are still using the service each day. One reason Napster is eager to portray itself as a healthy, going concern is that the company hasn’t given up on its effort at finding new business partners, or even an outright acquirer, according to a person close to the situation.

Napster has had discussions in recent weeks with Microsoft Corp., though a Napster spokeswoman said they involved using Microsoft software in future versions of the Napster service.

Napster, which allows its members to download music files from one another’s hard drives, has been under court order to keep copyrighted music out of its database. The company and the record industry, its legal nemesis, have disagreed about what steps it is legally required to take, and Napster’s first efforts at blocking music were almost completely ineffective.

Copyright (c) 2001 Dow Jones & Company, Inc.