Lime Wire is best known as the latest in a long chain of software that makes it easy to find and download music for free, replacing Napster, Grokster, eDonkey, Kazaa, and all the other applications and networks that shut down or cracked down on the sharing of copyrighted material.
Lime Wire LLP, the company that makes the Lime Wire software application, has also been sued by the Recording Industry Association of America (RIAA), but has so far refused to cave, saying that it only manufactures the software and has no control over how users choose to employ it. Moreover, it filed a countersuit in September 2006 on antitrust grounds, calling the RIAA an illegal cartel that conspires to destroy any distribution channel that the recording industry doesn't control.
A couple of days ago, the company announced that it would begin to offer approved downloads for sale from directly within the Lime Wire application. Unsurprisingly given their ongoing legal dispute with the RIAA, Lime Wire's distribution partners, IRIS and Nettwerk, represent small independent labels and artists rather than the majors. The files will be MP3s, and unprotected by DRM, meaning users won't ever face the problem that former Google Video downloaders now face. (DRM-protected files + cancelled service = the content you paid for can no longer be played.)
So does this mean that LimeWire is eventually going to follow Napster's path of trying to negotiate and build an industry-approved service? I would guess not--we all know how well that worked out for Napster. (The new Napster is merely the name, which Roxio bought for $5 million; Roxio changed its name to Napster when it sold off its other software busineses.) In fact, in a recent interview, anonymous LimeWire staffers told Slyck News that the company is improving its existing Lime Wire application, adding a technology that improves the ability to search for files on Gnutella (the P2P network on which LimeWire operates) and is adding support for the BitTorrent protocol, which supports swapping of much larger files (like video). For the time being, the business model will remain the same: offer a free version of the LimeWire application and hope to upsell consumers to a version with more features.
Still, this could be the beginning of an exit strategy in case the courts force Lime Wire to stop distributing its software in its current form.