[LINK] Pirate Bay Sold

[Tom Koltai]

Swedish entrepreneurs will turn site into legal file sharing download
site.

http://www.ft.com/cms/s/0/3c2622d8-6558-11de-8e34-00144feabdc0.html?ncli
ck_check=1
Sweden's Global Gaming to buy The Pirate Bay

By Maija Palmer,Technology correspondent 

Published: June 30 2009 11:56 | Last updated: June 30 2009 15:11

Global Gaming Factory, a Swedish software company, on Tuesday said it
had agreed a $7.7m deal to buy The Pirate Bay
<http://www.globalgamingfactory.com/> , the free file-sharing website at
the centre of a notorious court case. 

The four men running the website were sentenced to a year in jail and
fines of $3.6m
<http://www.ft.com/cms/s/0/675bb2ea-2b35-11de-b806-00144feabdc0.html> in
April, after being sued by music and film companies for allowing people
to illegally download copyrighted content. 

The Pirate Bay, which has more than 20m visitors a month, is one of the
world's largest websites for downloading files over the internet. 

Hans Pandeya, chief executive of Global Gaming Factory, said he would
change the business model of The Pirate Bay to allow content owners to
be paid for their material. 

"We would like to introduce models which entail that content providers
and copyright owners get paid for content that is downloaded via the
site," he said. "The Pirate Bay is a site that is among the top 100 most
visited internet sites in the world. However, in order to live on, The
Pirate Bay requires a new business model."

Analysts, however, remained sceptical about whether the site would be
able to make the transition. 

"There hasn't yet been a successful example of someone creating a legal
filesharing network," said Mark Mulligan, analyst at Forrester Research.
"It is very hard to convert an audience looking for free material into
one willing to pay."

Other filesharing operators such as Napster
<http://markets.ft.com/tearsheets/performance.asp?s=us:NAPS>  and Kazaa
<http://www.ft.com/cms/s/0/e9c461e6-5d35-11de-9d42-00144feabdc0.html>
have tried to convert to legal, paying operations in the wake of big
lawsuits. However, they have all seen user numbers dwindle to a fraction
of their previous levels. 

"We don't know the details and there are many questions to ask about how
this will work in practice, but we would be delighted if this resulted
in the Pirate Bay turning into a legitimate licensed service," said John
Kennedy, chief executive of the International Federation of the
Phonographic Industry, which has taken a strong role in fighting music
piracy. 

Global Gaming Factory, which is listed on the Sweden's Aktietorget
exchange, provides software to help manage internet cafes and gaming
centres. However, it is now branching into the filesharing market. 

The company also said on Tuesday it would buy Peerialism, another
Swedish technology company that makes filesharing technology, for $13m.
The company will raise money for the two transactions through the issue
of new shares. 

By using Peerialism's new technology, Global Gaming Factory will try to
create a new financial model for filesharing network - or "ecosystem" -
by harnessing the vast number of people sharing files over the internet
into a powerful, alternative content distribution network. Telecoms
companies facing too much traffic on their own systems could then pay to
send some of their data to this network. The filesharers would thereby
earn money which could be used to pay music and film companies for
content. 

However, Mr Pandeya said the company would not be able to compel any
filesharers to pay content owners. "We are trying to create a different
model that addresses the needs of the different parties. However, it is
up to them if they want to participate," he said. 




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