Shakeup hits ‘Net music firm

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Wednesday, May 15, 2002 | 9:55 a.m.

SAN FRANCISCO -- Napster Inc., the dorm-room experiment that revolutionized the music business, is in turmoil.

Chief Executive Konrad Hilbers and co-founder Shawn Fanning both stepped down Tuesday after the company's board rejected an agreement to be acquired by German media company Bertelsmann AG -- raising the possibility that the Internet pioneer might go under.

Fanning and Sean Parker created an Internet sensation three years ago when they founded the service, which allows users to swap music for free online. But the service angered the music industry, prompting a string of legal problems. Napster has been offline for nearly a year as it tries to meet guidelines handed down by a federal judge last year.