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In Free-Music Software, Technology Is Double-Edged
By MATT RICHTEL


magine returning home with a bounty of pirate's booty. Upon reaching shore, you're mugged and the treasure hoisted. You turn for relief to the local constable, who gives you a swift kick in the shins and a public reading of the definition of the word comeuppance.

The analogy is far from a perfect one for what's going on with Sharman Networks, an Internet company with headquarters in Sydney, Australia. But it does help suggest why a few people are giggling when Nikki Hemming, 35, Sharman's chief executive, says she wishes that people would just leave her alone to make an honest living.

Sharman Networks distributes a piece of software called Kazaa. As Napster used to do, the Kazaa network lets people exchange music without charge over the Internet, and they are exchanging it by the boatload. Some 64 million people have downloaded Kazaa within the last year, making it more popular than a video of an Ozzy Osbourne family brunch.

For obvious reasons, the record industry despises Kazaa. All the major record labels have sued Kazaa's creator, Fast Track, a Dutch company, contending that the software is basically a tool used for wholesale piracy of music, and the industry has explored whether to include Sharman in the lawsuit, according to people familiar with the case.

But Ms. Hemming already has her hands full. She has been busy keeping people from ripping off her own bounty.

It seems that while Sharman Networks gives away the Kazaa software, it is hardly a nonprofit company. It insinuates advertising into the Kazaa network, making money each time people download songs. Sharman does not advocate that people download copyrighted files, but it says it doesn't have the means to stop them.

But now some privateers have cut down Sharman's action by making and distributing stripped-down copies of Kazaa. The software still allows users to get on the Kazaa network and exchange free music. But the software removes the ads, which means that Sharman isn't paid. "They are offering Kazaa without the things that make Kazaa commercially viable for us," said Kelly Larabee, a Sharman spokeswoman.

The people at Sharman have a powerful sense of indignity. But some people may wonder if they've fallen a little short in the sense-of-consistency department.

Then there is geography. In this case, as some pirate stories do, this tale involves the high seas of the South Pacific.

Lawyers for Sharman have sent letters to people who they believe are copying Kazaa, but those individuals have not been easy to find. One copycat, who distributes "Kazaa Lite," obscured his identity by using a Web site registered through Tokelau, a group of islands north of Western Samoa.

If you're guessing that the reason to register through Tokelau is not its rich history of tech support, you'd be on the same page as Sharman's lawyer, Judy Jennings. She said people who register domain names through Tokelau are not required to give their names. "There is an implication they're doing it on purpose so they would be hard to find," she said.

Ms. Hemming, however, has been easier to find — at least for the last two weeks. During that time, she held her first news conference. Before that, a company publicist declined to provide any details about Sharman, like its specific whereabouts.

But in her conference call with the news media, Ms. Hemming divulged that the company is registered in Vanuatu. That's a group of South Pacific islands, which, she said, offers favorable tax status. (Ms. Hemming keeps Sharman's headquarters in Australia, which has favorable status in the restaurant and standard-of-living area.)

In other words, Sharman thinks that the creators of Kazaa Lite are cravenly hiding in Tokelau while Sharman itself operates in the open in Vanuatu. Sharman doesn't like the suggestion that it has spent months being less than candid about its whereabouts.

"It's not that we were hiding," Ms. Larabee said. "It's that we didn't clarify." This distinction between hiding and not clarifying is important, with broad implications. For instance, the accounting firm Arthur Andersen might note that it didn't hide documents related to Enron, just that it failed to clarify the documents would have to be viewed in very thin strips.

But as it pertains to the music issue, what Ms. Larabee and Sharman Networks are getting at is something that many people may know already: Vanuatu is no Tokelau.

Indeed, the people at Sharman see very few parallels between their complaints over copying and those of the record industry. Ms. Hemming says she just wants to make an honest living, and wishes that people would please stop taking what is rightfully hers. She might also wish that people would quit gigglinghttp://www.nytimes.com/2002/05/12/technology/12SLAS.html
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