New Kazaa software released

Sharman Networks released a new version of its Kazaa file-trading software Thursday, adding new features and advertising partners the company hopes will aid in its legal struggle for its life.

The new software adds little to the basic functions of the Net's most popular file-swapping program. However, Kazaa users will see an increase in the proportion of advertiser-paid, copy-protected search results as they hunt for their favorite artists or movies, the company said.

Sharman, which is fighting a copyright infringement lawsuit mounted by the record and film industries, touts Kazaa's role as a distributor of content as a cornerstone of its legal defense. In a recent court filing, the company contended that people download more than 15 million copy-protected files a month through the Kazaa service and its Altnet affiliate, which provides that content.

Kazaa "users have shown great interest in premium Altnet content," Sharman CEO Nikki Hemming said in a statement.

The battle over Kazaa is one of the most closely watched clashes in the contentious online entertainment distribution business. Record companies and movie studios are suing to have Sharman put out of business, saying that its business model is virtually identical to the now-departed Napster.

Sharman countersued the entertainment companies late last month, saying that the movie studios and record labels had violated antitrust law by refusing in concert to deal with the file-swapping company and its partners.

The battle has had little effect on the Kazaa network itself, which still routinely attracts about 4 million people at any given time of the day.

In addition to boosting the proportion of copy-protected results returned for each search, the new software includes new built-in tools for organizing libraries of songs, movies and software. Sharman also has added a new search feature for online personals, powered by MatchNet's AmericanSingles.com.

The company has removed several of the bundled pieces of software previously distributed with the Kazaa installation package, a move Sharman says will simplify the program's installation process.

News.com's John Borland contributed to this report.