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software for creating CDs from MP3s or encrypted digital music files. Roxio code shipped inside tens of millions of Microsoft-based PCs, and it came with the Pressplay online service from the major record labels. Roxio CEO Chris Gorog, a former Disney and Universal Studios executive, wasn't sure what he would do with Napster. Roxio had good relations with the record industry, but it had warned in an SEC filing that if free digital music declined under legal pressure, sales of its software could fall. The biggest factor behind Roxio's bid was the recent moves by the labels to make more content available online and allow more of it to be burned to CDs. The biggest questions were whether the second-generation Napster system could be made to distribute songs with restrictions on their use, if the labels would license content that way, and if consumers would accept whatever the resulting terms were.

But the value of the brand alone was still “absolutely monstrous” nearly eighteen months after Napster's shutdown, Gorog said. In one study by Roxio, 97 percent of those surveyed had heard of Napster, more than Yahoo or Amazon. Gorog thought he could start with a client-server Napster, reviving the site in a far smaller and more controlled way, while continuing to analyze the peer-to-peer Napster II. If everything went right, Roxio would find the middle road that had eluded everyone else, satisfying both the labels and consumers. The night before he announced Roxio's intentions, Gorog sought validation from the ultimate proxy for the public's desires, reaching Shawn Fanning on his cell phone. If a now independent Shawn still wanted “free music for the people,” as Judge Patel had put it, there would be no deal with the generational icon. If Shawn's remaining vision was about the “celestial jukebox,” where virtually everything was available for a modest fee, than anything was possible. “One teenager not only revolutionized the way music will be distributed, but also movies and the spoken word,” Gorog said. “What-ever we do will flow from that philosophy.” Both sides came away impressed by the phone call and a follow-up visit to Roxio's Santa Clara headquarters, and Shawn promised to think about helping Roxio. “I'd be very surprised if this didn't result in a very positive relationship,” Gorog said. “He's a brilliant kid, obviously, but I was very impressed with his speech—he's a pretty sophisticated guy. He's learned the ways of the world much faster than he intended to.”

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