SCOUR: EXCHANGING EXCHANGE FOR CHANGE?
Earlier this month, the well-capitalized, industry-friendly, online destination Listen.com announced it planned to acquire Scour's assets—including Exchange, servers and other equipment— for some $5 million and 527,000 shares of Listen stock. Listen also declared its intention to hire several members of its founding design team, notably President Dan Rodrigues.
But on 11/14, Oregon-based software applications developing and marketing company CenterSpan jumped into the mix, saying it planned to challenge Listen's bid. The cutoff for bids is Dec. 12.
With the explosive popularity of peer-to-peer technology on the Internet, file-sharing applications that have demonstrated an ability to gain users and grow without being crushed by the traffic (what digital-space types call "scalability") have become something of a holy grail.
With Napster now under the wing of Bertelsmann, Scour's application—with its substantial base—would be a bargain for a company seeking to emphasize the exchange of MP3 files. And, unlike Napster, Scour Exchange also allows users to swap video files (including full-length films) and still images.
Scour was hit with a lawsuit from both the MPAA (which foresaw an apocalyptic impact if users were allowed to swap movies online) and the RIAA in July. The fallout from the litigation included mass firings in September and a bankruptcy filing in October.
CenterSpan announced last month its intention to "launch a next generation peer-to-peer network incorporating digital rights management, which provides a secure, legal digital distribution channel enabling members to publish, search and purchase all forms of digital content." It remains to be seen whether such a heavily policed version of this system—which Listen.com chieftain Rob Reid has indicated was also essentially his plan—could retain Scour's users.
And the legal wrangling could get interesting, as U.S. Bankruptcy Court Judge Kathleen P. March rapped Scour's legal firm for owning Listen.com stock. Perkins Cole LLP received the stock for negotiating the acquisition of Wired Planet by Listen.com, but that hasn't stopped them from representing Scour. According to Inside.com, the Judge chastised the barristers, saying, "I've never seen this sort of professional irresponsibility." She added that they wouldn't receive any fees from Scour's sale.
The size of CenterSpan's intended bid has not yet been made public.
Meanwhile, Scour Exchange users—much like Napster users who anticipated the shuttering of that service prior to the Bertelsmann bombshell—are frantically downloading files before tomorrow's cutoff.
