Napster

1.0 Brief history, developments, and growth of Napster

Having witnessed his college room mate¡¦s frustration in trading MP3 audio files over the internet, Shawn Fanning had a vision where people could share their music with one another over the internet by using a peer to peer network coordinated by a central server. This was the central idea in the development of a service that became known as Napster. Fanning¡¦s uncle incorporated the company in May 1999 and began to secure capital investment. After initial development and testing the program was launched and the service¡¦s use grew exponentially, particularly among university students with access to high speed internet connections. In a short period of time Napster grew to over thirty million users¡¦ world wide.

Initially Napster needed to secure sufficient capital, develop a profitable business model and prepare for challenges from the RIAA. Napster was able to secure successive injections of capital from high pro...