• BusinessWeek, Thursday, October 5, 2006 11:32 AM

Skype co-founders Janus Friis and Niklas Zennstrom are trying their hand at online video, working together on a new software application that combines professionally produced TV and video with the Internet. Called "The Venice Project," the software connects with the Web and opens a full-screen window that apparently displays near high-definition-quality video images. This is more than just TV. If you toggle your mouse, a variety of tools appear while the video is playing. DVD-like controls appear at the bottom. On the left is a list of preset channels to choose from. Zennstrom and Friis have a history of developing disruptive technologies. They are the co-founders of the controversial peer-to-peer file-sharing program Kazaa, as well as Skype, the Web's leading voice over Internet Protocol application.

While Kazaa became the poster child for Internet piracy, Skype sold to eBay for $2.6 billion. Like Skype, The Venice Project is designed to work within the intellectual property rights system, not against it. It's built on peer-to-peer technology, but it's not a file-sharing system. The infrastructure is made up of user PCs--each with same software installed, rather than using central servers to store and distribute files. Users also don't download files; they stream them, which makes it much more difficult for users to distribute illegal copies of the content they're watching.

Zennstrom and Friis are entering a crowded field. Just this week, News Corp. said it would make TV shows available to users on MySpace. YouTube, Grouper, Video Egg, Revver and the video sites of the major Web portals could all be considered rivals.

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