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Sharman Networks launched an update to its popular file-swapping Kazaa Media Desktop software Tuesday, promising an improved interface, better search options, plus a new program that rewards users willing to share their PC with the network.

Sharman partner Brilliant Digital Entertainment and its subsidiary Altnet have added a new feature to KMD version 2.5, now available for download, that adds a new peer-to-peer network and a program called Peer Points Manager. The controversial program, announced earlier this month, offers rewards for participating users.

Industry watchers suggest the latest update is an attempt by Sharman to position Kazaa as a viable music-for-sale service, not a digital music piracy tool.

"The more Kazaa steers its users to buy content rather than download it for free, the more it bolsters Kazaa's argument that it's acting as legitimate service and not a media piracy haven," says Lee Black, senior analyst with Jupiter Research.

Altnet Pushes Content

Most people use Kazaa to share multimedia content for free, but the latest software update also lets Sharman push premium music, video, and software content available for purchase. The software uses special icons to distinguish premium content from the free stuff within standard search results.

The Peer Points system lets you trade hard drive space and Internet bandwidth for points redeemable for premium content, cash, and prizes. Kazaa uses your hard-drive space to store this premium content, and it utilizes your bandwidth to send it to other Kazaa users.

Altnet Chief Executive Officer Kevin Bermeister has likened this approach to baiting illegal file swappers into buying legitimate content.

The company's biggest challenge, however, likely won't be in attracting willing users, but in gathering the multimedia content people want.

"The biggest trick for Kazaa is attracting quality content that people want to buy," says Susan Kevorkian, senior analyst with market researcher IDC.

"It's still very much in the air whether Kazaa can win the hearts of content owners with the baggage of running a free peer-to-peer file swapping network at the same time."

New Features

In addition to its new Peer Point System, Kazaa 2.5 also includes new tabbed search results that let you run multiple searches at one time. Each new search you perform opens a new tab, so that you're no longer automatically overwriting your previous search.

You can also search the Web from within Kazaa 2.5 using the Web Search panel powered by Overture, says a Sharman spokesperson.

Another new feature is called Participation Level. In an effort to boost file quality and sharing, the software rewards users who consistently offer many high-quality files. Score enough points and you'll get more search results as well as priority over others when vying for the same file to download.

Other improvements include virus scanning of files through Kazaa partner Bullguard and access to the online dating service AmericanSingles.com. The beta preview of the software also introduces eight content channels, which link to various music, games, software, and community destinations.