Napster founder Shawn Fanning quit the revolutionary online file-swapping service he created in his Boston dorm room in a mass exodus Tuesday that almost certainly signals the end for the once-feisty music service.
Fanning, Chief Executive Konrad Hilbers and three other senior executives resigned after infighting on the board led to the collapse of negotiations between Napster and German media conglomerate Bertelsmann.
Drained of cash, after a bruising two-year battle with the record industry, and unable to launch a pay version of its once-wildly popular service, Napster will be forced to file for bankruptcy, said Hilbers who came from Bertelsmann.
``I have proposed a deal to the board that I find the best solution to a difficult situation at Napster. The majority of the board has turned it down,"" Hilbers said in an interview with the Mercury News. ``I dont really want to lead the company toward the alternative -- which in my mind can only be bankruptcy. So I have resigned.""
The looming bankruptcy of Napster marks a denouement for a technology that former Intel Chairman Andy Grove once dubbed `the next killer app."" Napster ignited an undiscovered passion for digital music. And in its heyday, it attracted more than 60 million registered users who traded music across the Internet.
Music-lovers cheered the underdog Napster as it challenged the Big Five record labels" claim over the rights to songs.
In the end, money proved Napsters undoing.
Sources close to the negotiations said the two Napster board members appointed by the Hummer Winblad Venture Partners, an early round investor, insisted on terms that would recover the funds $15 million investment -- and indemnify them from potential damages from future lawsuits.
News source: Siliconvalley.com