The Channel Wire

June 30, 2009

Swedish BitTorrent behemoth The Pirate Bay had between 20 million and 25 million users at its peak, but now that it has been sold to a software development company and turned "legal," the file sharing site that became a lightning rod for the recording industry will probably wind up little more than a footnote of the post-Napster era. The Pirate Bay is dead. Long live The Pirate Bay.

Well, OK, so it's not exactly dead. The Pirate Bay was acquired Tuesday -- for $7.74 million in cash and stock -- by Global Gaming Factory X (GGF), a Stockholm-based software developer and owner of gaming centers and Internet cafes.

Once the deal is finished, GGF will own The Pirate Bay lock, stock and barrel, including its domain names and all of its related Web sites. GGF said it will use The Pirate Bay to create an outlet for legal file sharing, and also said it had acquired Peerialism, the technology company that developed The Pirate Bay's file sharing platform. Presumably, the GGF portfolio will also include Video Bay, a new video-sharing site that positions The Pirate Bay in direct competition with services like YouTube.

The sale comes less than a week after The Pirate Bay's defendants lost their bid in Sweden's Court of Appeals for a retrial. The file sharing site's three founders, plus an investor, were found guilty of aiding copyright infringement in April, ordered to pay a collective fine of 30 million kronor (about $3.9 million) and sentenced to one year in jail each.

The Pirate Bay's lawyers had argued during the trial that The Pirate Bay does not host any copyrighted content -- it's a conduit, they suggested, and it's users who are responsible if there's any illegal file sharing going on. But the Swedish court didn't see it the same way and ruled in favor of the International Federation of the Phonographic Industry (IFPI), which represented various movie and music recording companies like 20th Century Fox and Warner Bros.

On Tuesday, The Pirate Bay's founders confirmed the deal with GGF in an unsigned blog post that read: "TPB is being sold for a great bit underneath its value, if the money would be the interesting part. It's not. The interesting thing is that the right people with the right attitude and possibilities keep running the site."

"The old crew is still around in different ways," the post went on to say. "We will also not stop being active in the politics of the Internet -- quite the opposite. Now we're fueling up for going into the next gear."

GGF sounded a similarly optimistic tone in its press release.

"GGF wants to accept the challenge to position itself as a respectable participant in the market and contribute to the Internet's infrastructure, with the goal to establish working models for co-operation and a clear allocation of responsibilities on market terms, respecting both intellectual property rights and the rights of privacy," said Hans Chandra Pandeya, GGF's CEO, in a statement.

But initial reaction among users to The Pirate Bay's sale has not been so friendly, with commenters on the Pirate Bay's blog post calling the founders "sellouts" and the turn of events "a sad day," with one poster accusing the Pirate Bay's founders of thinking its users "stupid enough to believe them when they say it's a win-win-win."

Our take? The Pirate Bay is essentially gone. At worst, the fears of its most paranoid users will be confirmed and their personal information will be divulged to the IFPI and other anti-piracy groups continuing a fruitless campaign to rid the Internet of BitTorrent and illegal file sharing.

Granted, that's not likely to happen. But at best? The Pirate Bay will be most likely remembered as another milestone in the file sharing service lineage that began -- at least in the popular view -- with Napster. And like Napster, which sputtered after it was relaunched as a legal, prescription-plan service and later sold to Best Buy, it will soon become yesterday's news as the next big thing in file sharing -- legal or illegal -- takes over.