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New Kazaa likely to raise labels' ire

An overhauled version of the popular file-swapping software Kazaa has been unleashed on the Internet, with features sure to make record and movie studio executives' blood boil.

An overhauled version of the popular file-swapping software Kazaa was unleashed Monday on the Internet, with features sure to make record and movie studio executives' blood boil.

The new software shows clear ambitions on the part of Kazaa parent company Sharman Networks to spread beyond its file-swapping origins, while expanding the utility of basic file-trading functions.

Sharman's management, which still faces lawsuits by the big record labels and movie studios, had little to say beyond the new features' ability to make file swapping easier.

"We've given users better options and more tools than ever before," said Sharman CEO Nikki Hemming, in a statement.

Like other file-swapping companies, Sharman is seeking a way to turn the actions of its millions of users into a steady cash stream. The Kazaa application has been downloaded more than 120 million times in the past year, making it one of the most popular pieces of software in the Net's history--even accounting for the multiple times that many people have downloaded the program.

The company is turning to partnerships with commerce companies as it looks for revenue and is blazing new ground by adding a program of paid search results similar to the Web search company Overture Services. Working with loosely affiliated company Altnet, companies buy keywords inside the Kazaa software and ensure that their products show up search results using those keywords.

In the new version of the software, several partners are highlighted, including Cornerband, a company that explicitly distributes bands' music through Kazaa. Sharman has also signed a distribution deal with Tiscali, a large European broadband Internet service provider that touts better peer-to-peer access as a reason to sign up for its service.

The software also contains a basic Web search function, allowing people to use it as a gateway to ordinary Web pages as well as other people's computers.

But it is the new features of the software focused on file trading that are most likely to ruffle feathers among copyright holders.

Following in the footsteps of rival StreamCast Networks' Morpheus software, the new Kazaa allows searches by "playlist," letting groups of songs be downloaded as a single item. The company touts this as a way for people to share diverse lists of songs by different artists, while warning against trading copyrighted works. In reality, this new option provides a new, simple way to download albums all at once instead of song by song.

The new software also takes direct aim at several of the measures that record companies and movies studios have been taking to counteract peer-to-peer piracy. A cottage industry of companies has sprung up that saturates file-swapping networks with false or corrupted versions of songs and videos, hoping to frustrate would-be downloaders.

Kazaa's new software allows people to rate files so that corrupt or false files will quickly collect ratings poor enough to warn people away from downloading them. It also comes with a setting called "filter bogus music and video files" that is set by default as active.

Sharman, along with Streamcast Networks and Grokster, is scheduled to meet the record and movie studios in court on Dec. 2.