By John Borland

Staff Writer, CNET News.com

April 1, 2002, 5:35 PM PT

A California company has quietly attached its software to millions of downloads of the popular Kazaa file-trading program and plans to remotely "turn on" people's PCs, welding them into a new network of its own.

Brilliant Digital Entertainment , a California-based digital advertising technology company, has been distributing its 3D ad technology along with the Kazaa software since late last fall. But in a federal securities filing Monday, the company revealed it also has been installing more ambitious technology that could turn every computer running Kazaa into a node in a new network controlled by Brilliant Digital.

The company plans to wake up the millions of computers that have installed its software in as soon as four weeks. It plans to use the machines--with their owners' permission--to host and distribute other companies' content, such as advertising or music. Alternatively, it might borrow people's unused processing power to help with other companies' complicated computing tasks.

Brilliant Digital CEO Kevin Bermeister says computers or Internet connections won't be used without their owners' permission. But the company will nevertheless have access to millions of computers at once, almost as easily as turning on a light switch.

"Everybody will get turned on in more or less a simultaneous fashion," Bermeister said. "This will be an opt-in program...We're trying to create a secure network based on end-user relationships."

The Brilliant Digital plan is the most ambitious yet from a string of companies that have tried to make money off the millions of people who are downloading and using free file-swapping programs such as Kazaa, MusicCity's Morpheus or LimeWire.

Nearly all of the file-swapping programs now routinely come bundled with so-called adware or spy ware--programs that automatically pop up advertisements while people surf the Web or that keep track of where someone surfs, information that can then be sold to marketing companies. Despite growing concerns about this bundled software, usage and downloads of the file-swapping programs are at an all-time high.

But Brilliant's plan, by tapping into the computer resources of the file-swappers themselves, has fallen into a new realm where start-ups such as Kontiki and Red Swoosh are just starting to gain traction. Those companies are trying to use peer-to-peer technology to distribute content more quickly online, but they face a battle convincing people to install their software and become distribution points.

Brilliant, by contrast, already has potentially tens of millions of computers in its network, simply by piggybacking on top of Kazaa.

According to CNET Download.com, a popular software aggregation site owned by News.com publisher CNET Networks, the Kazaa software--and by extension the Brilliant software--was downloaded more than 2.6 million times last week alone. Brilliant has been distributing the core technology for its peer-to-peer service along with Kazaa since February, Bermeister said.

[Brilliant Digital's federal securities filing] The Brilliant network is based on a piece of software called "Altnet Secureinstall," which is bundled with the Kazaa software. That technology can connect to other peer-to-peer networks, ad servers or file servers independently of the Kazaa software and can be automatically updated to add new features, according to Brilliant's filing.

When the software is "turned on," computers running the Brilliant software will form a new peer-to-peer network separate from but connected to Kazaa, the filing said. A few computers with fast connections will form the early core of the network and be asked to join first. Other ordinary computers and Net connections will be invited later, Bermeister said.

Brilliant's software will be able to understand and respond to searches inside Kazaa, since it is based on the same technology. But if it is successful, Brilliant will be able to host content and run "distributed computing" applications over the new network that is entirely separate from Kazaa or other file-swapping networks based on the same technology.

Working behind the scenes

Brilliant and Bermeister have played a central role in many of the events shaping the file-swapping world in the past few months.

Bermeister began distributing his company's 3D advertising software along with the Kazaa software last year. That's how he got to know the founders of Kazaa BV, the Dutch company that created the file-swapping technology originally used by Kazaa, Morpheus and Grokster.

When the Kazaa BV founders decided they didn't want to be in the network business, Bermeister introduced them to a former associate in Australia, Nicola Hemming. Her new company, Sharman Networks, bought the Kazaa software and continues to distribute it.

Bermeister is now drawing on his association with the Dutch programmers for his new venture. Brilliant has created a new company for the peer-to-peer service, called Altnet. It has licensed the Dutch programmers' technology from their new venture, called Blastoise. According to Brilliant's annual report, filed Monday, the Dutch programmers have taken a 49 percent stake in Altnet.

Brilliant has been subpoenaed in the record labels and big movie studios' copyright infringement lawsuit against Kazaa BV. No suit has been filed against Brilliant or Sharman Networks, however.

The immediate plans for Altnet, Brilliant and the new peer-to-peer network remain unclear.

Bermeister said the company had been testing the technology along with ad giants DoubleClick as a way to serve ordinary Web ads more quickly. Under this plan, an ad that a person sees on a Web site might be hosted by a nearby computer running Brilliant's Altnet instead of on a central ad server, as now typically happens with DoubleClick.

Brilliant's CEO was quick to note that people would be asked before their computers were used for this or other purposes. He said the software would show a pop-up box explaining the network's function and giving people a chance to turn it off. People who allow their computers to be used will be compensated somehow, possibly with gift certificates or free videos, the company's filing said.

However, people who accept "terms of service" already distributed with Brilliant's and Kazaa's software are already agreeing to let their computers be used without any payment at all.

"You hereby grant (Brilliant) the right to access and use the unused computing power and storage space on your computer/s and/or Internet access or bandwidth for the aggregation of content and use in distributed computing," the terms of service read. "The user acknowledges and authorizes this use without the right of compensation."

[How to uninstall Brilliant Digital's software] Anybody who declines this provision is not able to install the Kazaa file-swapping software. Brilliant's software can be disabled or removed after installation without affecting Kazaa's performance, however.

A representative for Sharman, which distributes the Kazaa software, could not be reached for comment.

Privacy-rights advocates contacted for comment expressed some concern about the way the Altnet software has been distributed and about whether the millions of people who already have it installed on their computers will be tech-savvy enough to know what they're agreeing to when and if Brilliant does ask to use their computers.

"A lot of the people most likely to use this software are teenagers or college students. There's a lack of sensitivity about privacy in that age group," said Larry Poneman, CEO of Privacy Council, which helps companies manage privacy issues. "Do they really want to be commandeered and have their machines do things that aren't necessarily in their best interest?"

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