First, a caveat: KaZaA is known to include spyware, and I would never personally install it — or recommend that anyone install it — unless the idea of corporations profiting from the use of their computer without their permission appeals to them. That being said…
The NY Times has an interesting article about turning people that steal music (i.e. KaZaA users) into (gasp!) customers by offering them products and services that they’ll find valuable. The way it works is that people are presented ads based on what they’re searching for — people searching for Some entertainment industry lawyers fear that if Sharman [Networks, KaZaA’s distributor] can prove that KaZaA has legitimate uses, it will be harder to shut it down. Others, however, say that by displaying some material more prominently than others, Altnet’s service helps to prove their point that KaZaA could block all copyright material from appearing in its search results. Sharman has maintained that it has no way to control what files users chose to use the KaZaA software.
KaZaA will fail, not because of RIAA hacking but because they’ve lost the trust of early adopters. The record industry will continue to be too clueless (or too proud) to come up with innovative ways give the people what they want. Link (free registration required)