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Pirate Bay Gets New Owner, May Go Legit

Controversial file-sharing site The Pirate Bay may have a new lease on life despite its operators' conviction on copyright violations, thanks to a new owner, Swedish software firm Global Gaming Factory X.

Global Gaming Factory X (GGF), which offers on-screen advertising, software distribution and management tools for Internet cafes, today said it has struck a deal to acquire the BitTorrent site.

Once the deal -- valued at 60 million Swedish kronor (US$7.84 million) in cash and stock -- closes in August, The Pirate Bay's new owner plans to overhaul the P2P site with a new business model that provides for compensating content owners.

"We would like to introduce models which entail that content providers and copyright owners get paid for content that is downloaded via the site," GGF CEO Hans Pandeya said in a statement. "The Pirate Bay ... is among the top 100 most-visited Internet sites in the world. However, in order to live on, The Pirate Bay requires a new business model, which satisfies the requirements and needs of all parties, content providers, broadband operators, end users, and the judiciary."

"Content creators and providers need to control their content and get paid for it," he said. "File sharers' need faster downloads and better quality."

Once complete, the deal would mark a dramatic shift for The Pirate Bay, which grew in popularity as BitTorrent file-sharing proliferated. In addition to the wide distribution of copyrighted material facilitated by the site, The Pirate Bay also became notorious for its operators' criticism of the entertainment and software industries and their efforts to clamp down on file-sharing.

In April, a Swedish court found The Pirate Bay's operators, Peter Kolmisoppi, Frederik Neij, Gottfrid Svartholm Warg, and its financial backer, Carl Lundström, guilty of violating copyright law -- slapping them with a year in jail and fines totaling 30 million Swedish kronor ($3.58 million). The verdict is currently in appeal.

Peerialism acquisition

Global Gaming Factory X's plans don't end with The Pirate Bay, however. The company today also said it's acquiring another Swedish firm, Peerialism, which makes data distribution and distributed storage software based on P2P technology.

Peerialism CEO Johan Ljungberg said in a statement that the idea is now for his company's offerings, which are based on technology developed at the KTH Royal Institute of Technology and the Swedish Institute of Computer Science, to be tied into The Pirate Bay.

"Peerialism has developed a new data distribution technology which now can be introduced on the best known file-sharing site, The Pirate Bay," Ljungberg said. "Since the technology is compatible with the existing it will quickly allow for new values to be created for all key stakeholders and facilitate new business opportunities."

Global Gaming Factory X will be paying about 100 million kronor ($13.07 million) in cash and stock for Peerialism, it said.

[cob:Special_Report]"As a result of the acquisitions of The Pirate Bay and Peerialism, GGF will have a strategic position in the international digital distribution market," Pandeya said. "File-sharing traffic is estimated to account for more than half of today's global Internet traffic. The Pirate Bay has a global brand and holds a key position with over 20 million visitors and over one billion page views per month."

Both deals each still require approval from Global Gaming Factory X's shareholders, and are contingent on it obtaining financing for the acquisitions, the company said.

While Peerialism's employees will join the merged company, the fate of The Pirate Bay's founders remains unclear.