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Rob Lord left IUMA to join a music firm called N2K, which published a magazine, sold compact discs online, and put up websites for Madonna and other rock stars. As he kept a close eye on the MP3 scene, Lord made it one of his top priorities to get N2K into some kind of alliance with Frankel's tiny company, Nullsoft Inc. “I was kind of shrugged off” by N2K executives, Lord said. So he asked Frankel if he could join Nullsoft instead. “He said he wasn't very interested in turning Nullsoft into a [serious] business, but that he would listen to ideas.” Lord had several. How about putting a picture of the product on the website? How about selling ads? Ads, Frankel mused. Okay, see what you can do. Lord went to ArtistDirect, another Web music retailer, and showed the company the immense traffic Nullsoft was getting to its site as people downloaded Winamp and other software. Lord returned to Frankel with a six-month advertising contract from ArtistDirect and a check for $300,000. A surprised Frankel asked his parents what to do. His father recruited an acquaintance as a business-development man and teamed him with Lord to write a plan. They returned with a white paper predicting that if Frankel continued on his own, he could build a company worth $1 million. With help, they said, it could be worth tens of millions.

Nullsoft hired both men. The company stayed very small, with five or six people working in separate offices in Sedona and communicating over IRC. They arranged advertising for the site and immediately began striking deals, including one to incorporate a modified browser that allowed Winamp users to buy CDs from Amazon. And they made new versions of Winamp compatible with the industry's secure digital formats as soon as they became available. “I'm not about piracy,” Lord said. He even called the Recording Industry Association of America as a courtesy, explaining what they were doing and giving his phone number in case the organization had any questions.

The RIAA didn't have any grounds to go after Nullsoft, which was distributing a product that could be used legally or illegally. But the trade group certainly didn't like what was happening. The spread of the technology made it a simple matter for someone to buy a CD legally, rip it into an MP3 format, and post it for others to download. David Weekly, a Stanford University student, did just that—a lot—until Geffen Records executives complained and university network administrators, already

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