Scour Pulls Plug On File-Swapping Service

Scour Inc. will shut downs its peer-to-peer file sharing
network by the end of the day Thursday, hoping to avoid worsening
its situation on the legal front at the same time that it gets its
financial affairs in order.

Los Angeles-based Scour, a multimedia-search service that became a
peer-to-peer file swapper with the launch earlier this year of its
Scour Exchange, filed for Chapter 11 bankruptcy protection in
October. The move suspended a copyright-infringement lawsuit
launched by both the recording industry and the major motion
picture studios - a legal pickle that the company said scared away
new sources of funding.

Following a session in US Bankruptcy Court Tuesday, Scour said the
court gave the OK to disabled Scout Exchange and that it would shut
down the service within 48 hours.

"We believe our unilateral decision to take down the Exchange will
facilitate a resolution of the copyright infringement litigation
pending against Scour," said company President Dan Rodrigues. "In
addition, we expect the shutdown of the Exchange to facilitate a
sale of Scour's assets, which will maximize creditor recovery."

On Nov. 1, a proposal by record-label-backed Listen.com to purchase
Scour's assets was submitted to the bankruptcy court. That company,
whose online music guide has been funded in part by all five major
labels, said it would pay $5 million in cash plus 527,918 shares of
Listen.com stock.

However, on Tuesday, CenterSpan Communications Corp. of Hillsboro,
Or., announced it was submitting a competitive bid for Scour's
remains.

CenterSpan, formerly known as joystick maker ThrustMaster Corp.,
has billed itself as a peer-to-peer networking company for gaming
and content after jettisoning its hardware business a year ago.

Frank Hausmann, CenterSpan's chief executive officer, said in a
statement that purchasing Scour's assets "will help accelerate the
delivery of our digital distribution channel."

"While our bid will be structured as an asset acquisition to avoid
contingent liabilities, internally we view Scour as very strategic
and want the Scour founders and employees to join our team,"
Hausmann said.

On October, CenterSpan unveiled its plans for a peer-to-peer
network that incorporated digital rights management, enabling
for-pay distribution of digital music, videos and e-books.

"We have been working with peer-to-peer architecture for over two
years and believe our new secure and legal solution will be the
technology platform of choice for major content owners," Hausmann
said.

In September, Scour laid off 52 employees - nearly its entire
workforce - to concentrate on its legal case. Scour, was founded in
1997 by five UCLA computer science students and counted former
Disney executive Michael Ovitz among its major investors.

Scour can be found online at: http://www.scour.com/.

Listen.com is at: http://www.listen.com/.