Scour scraps file-swapping service
The company shuts down its file-swapping service, saying the move will help resolve a copyright infringement lawsuit and facilitate the sale of its assets in a bankruptcy proceeding.
In a notification on its Web site, Scour said its future remains "bright," noting that 7 million people had downloaded the company's Scour Exchange software by the time of the closure. The message added that all other Scour services remain in operation, and that several suitors have expressed interest in acquiring its file-swapping technology.
"With heavy hearts, we have come to this decision after months of litigation with the music and movie industries, a bankruptcy and a series of layoffs of our staff," read the notice.
Representatives for Scour could not be reached for comment.
Scour's Exchange software lets people trade videos, images and other files for free, including MP3s--much like its more famous cousin, Napster. Such services have been targeted with lawsuits from record labels and the motion picture industry, which claim the services contribute to massive Internet piracy.
Founded in 1997 as a multimedia Internet guide, Scour turned to file swapping after Napster proved the enormous popularity of such services.
Aware of potential legal problems, Scour designed its file-swapping service in consultation with copyright attorneys. It also lined up the backing of Hollywood power broker Michael Ovitz.
Regardless of those apparent advantages, it was soon targeted by motion picture and music industry associations, claiming Scour Exchange was being used to trade illegal copies of videos, songs and other digital content.
The taint of the suit pushed the company's back against the wall as it searched for new funding, leading to a round of layoffs and ultimately a bankruptcy filing.
"The pending litigation has made it very hard for our company to raise the financing that we needed to continue bringing you our exciting services," Thursday's notification read. "Even after filing for Chapter 11 protection, we continued bringing you Scour Exchange for as long as we could, while still trying to work out a resolution for the benefit of all."
Bidders for the company that have emerged so far include San Francisco-based Listen.com and CenterSpan Communications of Hillsboro, Ore.