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our current options. . . . Get me involved and I will be accountable to YOU for bringing the financing issue to a close. Yosi, what about providing the value of VC introductions? John, please do a better job of managing the board. This is critical . . . the fortunecity deal is a longshot. We must keep our options alive.”

Fanning was inclined to go with Bales. He responded to both Bales and Amram: “I totally agree. I am flabbergasted at the notion that I brought in professional management with the specific focused goal of getting the company venture financed, hopefully by KP [Kleiner Perkins]. It’s been 5 months and we are no closer today than we were then. I’m really disgusted by the lost opportunity. John.”

Amram, stepping in once more as mediator, then added his opinion: “I don’t think saying we are no closer today is fair.” Fanning replied with the last word, saying that in his view the problem was exacerbated because Napster had grown too valuable. “Not to be argumentative but we may in fact be further away,” Fanning wrote. “If the companies [sic] value has risen out of the range of most top tier VCs then we have the problem Bill outlined. John.”

Even while waging his rearguard action at Napster, Bales was talking to Fanning about new ventures, including some that would be potential competitors to Napster. In ordinary times and at ordinary companies, such discussions could be considered a conflict of interest for Fanning. The idea that Bales spent most of his post-Napster time on was something he called AppleSoup. It was another hybrid peer-to-peer system, meaning that it would keep central control of content that was housed on users’ computers. But instead of swapping music, users would swap short films or animation. And it would come with a rights-management system, so that the creators of the content would have to approve each transfer and viewing. Since Napster at times considered expanding from music into other media, a conflict could have arisen. But that didn’t stop Bales, Fanning, or even Amram. By the time Bales unveiled AppleSoup in the summer of 2000, his announced investors included both those Napster directors, entertainment executive Frank Biondi, and the son of MPAA