Napster founder scales new peaks

Based in San Francisco and backed by angel investor Ron Conway -- who also initially funded Napster -- Snocap has for months been quietly writing code and building the bridges to the music world that Napster lacked, according to sources familiar with the company.

Fanning's role as the creator of the music industry's arch-enemy does not seem to be holding him back. Snocap's plan, which involves identifying music files being traded through file-swapping networks and then attaching a price tag to them, is resonating well with music industry executives.

"It's a pretty well thought-out idea, but the success of it hinges on everybody in the ecosystem getting involved," said one record label executive familiar with Snocap. "The key to its success is the peer-to-peer companies agreeing to participate. If they do participate, it could be phenomenal."

Requests for comment from Fanning and other Snocap employees were not returned.

Fanning's return to the peer-to-peer world is one of the most ambitious of several ongoing attempts to bring about a detente between file-swapping networks and record labels, which have been at war almost since the day Napster launched in 1999.

Today's unrivalled file-swapping leader, Sharman Networks' Kazaa, is closely affiliated with Altnet, a division of Brilliant Digital Entertainment that seeds file-swapping search results with authorised files such as games or music. Altnet has been trying unsuccessfully for more than a year to strike distribution deals with major record labels and movie studios. Sharman is now suing the entertainment companies on antitrust grounds, alleging that they are colluding against peer-to-peer companies.

Altnet and Sharman have also helped create a forum called the Distributed Computing Industry Association, which is trying to bring entertainment companies and file-trading companies to a negotiating table in order to work out their differences. That effort is still in the early stages, however.