Napster creator gets along with big business

• SHAWN FANNING turns 25 on Tuesday, and it's been a very long seven years since he wrote a little computer program that let him trade electronic music files with his dorm mates at Northeastern University in Boston, where he was a freshman.
• He called it Napster, after his nickname, and it quickly grew into an Internet phenomenon - not to mention the music industry's bête noire until it was shut down by the courts four years ago.
• This month, Grokster, one of the file-sharing services that emerged after the original Napster vanished, stopped distributing its software and agreed to pay the record industry $50 million, which it has no prospect of ever raising.
• By year-end, a new version of Grokster will appear - this one sanctioned by the record industry because it will use technology, built by Mr. Fanning, that requires file-swappers to pay for copyrighted material.
• In other words, Mr. Fanning, who let the genie out of the bottle when he created the copyright-busting Napster, is now selling a way to put the genie back into the bottle.
• His new company, called Snocap, has produced software that can enable music services to fulfill the original promise of Napster - a community of dedicated fans exchanging a wide selection of music - while monitoring the file-trading for copyrighted works.
• The new Grokster will still use peer-to-peer technology, which lets users download songs directly to one another's computers.
• After the original Napster closed, the name was sold to a new company that sells licensed music under paid subscriptions and does not use peer-to-peer technology.
• He wants to create an open system that would allow anyone with music to share - big labels and garage bands alike - to register their works with Snocap and set the economic terms under which songs could be traded.