MAY 15, 2000
COVER STORY -- E.BIZ -- THE E.BIZ 25

By: Spencer E. Ante


Shawn Fanning



Napster
----------
Position: Co-founder and lead software engineer

Contribution: Developed a free software program that allows people to easily exchange recordings via the Net--cutting out stores and music publishers.

Challenge: To beat lawsuits brought by music companies that are losing sales. And to make money.

Shawn Fanning paces the cavernous studio, absorbing the surreal sight of so many New Economy luminaries. Yahoo! Inc.'s Timothy A. Koogle adjusts his mane of gray hair in the mirror, while VerticalNet Inc.'s Mark Walsh keeps slapping the back of Softbank Corp.'s Masayoshi Son. They've all come to San Francisco to have their pictures taken for this magazine's list of the Internet's 25 VIPs. Fanning, all of 19 years old, is here because of Napster, a startup named for a software program he wrote that's giving the music industry the bum's rush. He looks like a child among adults, and he knows it. ''This is really weird,'' Fanning mutters. ''Really weird.''
In any other industry, Fanning would be fetching coffee for the bigs. But this is the Net, and Fanning is a shaved-head star who represents the innovative spirit of e-business. "It just shows you that truly great new ideas will always find their way into the marketplace," Koogle says of Fanning and Napster.

Fanning's contribution, conceived while he was a freshman at Boston's Northeastern University, is a free, downloadable program that transforms PCs into servers for exchanging MP3 music files over the Net. By letting individuals tap into each other's tunes, Napster has created the world's biggest bootleg record collection. Looking for that Wham! song you lost when your mom threw out all of your old LPs? It's probably there--along with millions of other hits, new and old. Napster won't reveal how many times the program has been downloaded, but estimates range from the hundreds of thousands to the millions.

Of course, the music industry isn't happy about Napster. Fanning is already entangled in a lawsuit brought by recording industry heavyweights, including Universal, Sony, and BMG. And now, artists such as rap icon Dr. Dre are suing Napster. They fume that it's a copyright-violation machine. Still, Napster has yet to make a dime off the free service. It hopes that by building limited copyright protections in, the company can become an e-commerce and marketing outlet for the music biz.

If Fanning is nervous, he's not showing it. That's because he doesn't care much about money. He has already made his mark by forever changing the way people find music. And even if he loses the lawsuits and has to shut down his service, Napster will survive in the form of a half-dozen clones storming the Net.



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