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MSN won't market through file-trading service

The software giant blocks a marketing arrangement that would have seen Aimster release a version of its software co-branded with the Microsoft Network site.

Microsoft has blocked a marketing arrangement that would have seen the controversial Aimster file-swapping service release a version of its software co-branded with the Microsoft Network site.

As reported earlier, Aimster and a third-party marketing firm had developed a "skin" that would have given the file-swapping service much of the look and feel of MSN. Links to the MSN site were also included.

But after news of the arrangement broke, Microsoft asked that the "skin" be removed from Aimster's Web site.

The marketing arrangement, although small in the scheme of technology partnerships, came at a potentially awkward time for the software giant, which is trying to win support from major record companies for its MSN Music service. The record labels sued Aimster last week, alleging that like Napster, the service allows people to violate copyrights by trading music online.

In addition to songs, the Aimster service can be used to search for and download Microsoft software, such as the Office suite. The relationship was struck through an outside marketing agency and not directly by Microsoft itself, sources close to the companies said.

A Microsoft representative declined to comment on the co-branding issue.

The unexpected link, no matter how tenuous, underlines the painful ambivalence of many major companies toward the file-swapping phenomenon. Services such as Napster and Aimster have been among the fastest-growing communities on the Web, a status that ordinarily would put them squarely in front of marketers' eyes.

But stiff opposition by the powerful record and film companies toward the Net upstarts has given most of the fast-growing newcomers an untouchable status.

Aimster has been one of the only file-swapping companies to break periodically out of this digital ghetto. Last year, Capital Records partnered with the company to promote an upcoming album by British band Radiohead, for example, although the agreement stopped well short of allowing people to trade the band's songs through the service.

Like Napster, Aimster is now fighting for its survival in court against the record companies.

The company has contended that its service is legal, since it largely provides an encrypted network that allows people to chat privately and exchange whatever types of files they chose, not simply music.

But it also offers an unrestricted service that allows people to search each others' hard drives for music or videos, which works much like Napster itself.

"Beneath the added bells and whistles lies the same service that Napster provides," Cary Sherman, general counsel for the Recording Industry Association of America, said in a statement following the group's lawsuit last week.

The two sides met briefly in court Wednesday to hash out procedural issues for the case as it moves ahead. Aimster previously asked a federal court for a "declaratory judgment" ruling that the file-swapping service was legal, and judges have put the RIAA suit temporarily on hold to decide which court should hear the various issues.

In a tangential legal matter, Aimster CEO Johnny Deep said his company would file an appeal in Virginia federal court late Thursday or Friday of an arbitration panel's decision to give the domain name to America Online. The AOL Time Warner division argued that Aimster was an infringement of its trademark on the name of its instant messaging service, AOL Instant Messenger (AIM).