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Coming as a one-two punch at the piracy-plagued music industry, Sharman Networks Monday released a new version of its popular peer-to-peer file-swapping software Kazaa, giving users enhanced file-swapping capabilities, while at the same time announcing a deal with a major European Internet service provider that may help raise its legitimacy level.

Kazaa Media Desktop version 2 is available now for free download.

In addition to updating the Kazaa Desktop, Sharman Networks has sealed a deal with major European ISP Tiscali SpA, whereby the P2P company advertises Tiscali's broadband service to its legions of users in exchange for getting paid a small "bounty" when its users sign up with Tiscali. Tiscali, the leading independent European ISP, is based in Italy but has operations in 15 countries, including France, Germany, and the United Kingdom.

"We feel very strongly about the significance of P2P as a driver of broadband adoption and appreciate that it is a priority in these countries," says Kelly Larabee, a spokesperson for Sharman Networks.

While the music industry continues to battle file-swapping services like Kazaa because they allow users to trade copyright-protected works, ISPs are recognizing the potential gain that the media delivery services could provide--mainly, users. According to Kazaa, users have downloaded more than 120 million files from its network to date, and have racked up considerable time culling through their available content.

New and Improved

And if Kazaa's burgeoning reputation as a broadband promoter doesn't leave music execs chagrined, Kazaa's souped-up trading features might.

The latest version of the P2P software allows users to share playlists, which can be downloaded as a collection. It also offers Web searching through the Kazaa interface, user file integrity ratings, and integrated antivirus protection, as well as music content from online music community Cornerband.com.

Kazaa version 2 will also reward frequent users for their participation by giving them a higher priority in download queues.

In addition, a Kazaa Showcase feature links users to premium content available on the Altnet network, which recently put its micropayment system in place, allowing users to purchase music, video, and software.

The new software and ISP alliance should place Kazaa in a strong position among P2P service providers, which are expected to experience continued growth over the next few years. According to the latest Yankee Group research, U.S. users alone are expected to download 7.44 billion audio files from unlicensed file-swapping services in 2005.