Nullsoft, 1997-2004 (2004)

When America Online purged its tiny Nullsoft branch of all but three employees this week, it lost arguably the most prolific division of the company. Not that you could really blame AOL for the mass layoffs—all of Nullsoft’s projects were spitballs tossed at the honchos upstairs. Before the AOL days, Nullsoft founder Justin Frankel and his team of whiz kids practically invented the MP3 craze when they rolled out their Winamp player and Shoutcast server. When AOL paid millions to buy the then-20-year-old Frankel’s services in 1999, he used his new gig to become what Rolling Stone called “the Net’s No. 1 punk.”

From his AOL office, Frankel posted applications (without his corporate parent’s permission) that made screwing the Recording Industry Association of America easier than ever, including the peer-to-peer program Gnutella and the covert file-sharing system WASTE. Frankel quit at the beginning of this year, and Nullsoft’s shutdown nails the coffin lid shut. There’ll be no more cool pirate tools underwritten by America Online.

What kind of snot-nosed brat takes millions from AOL and then publishes software perfect for ripping off Time Warner’s entire catalog? Frankel, a grunge-dressing slacker from Sedona, Ariz., was a teenage college dropout in 1997 when he wrote Winamp, the first program that made playing MP3s on a PC point-and-click simple. He’s not the world’s greatest programmer, but Frankel has a knack for finding simple and clever solutions to huge engineering problems. While he’s got a prankster’s streak—one of his high-school hacks was a keystroke logger for the teachers’ computers—Frankel didn’t write Winamp so he could steal music. All he wanted was a better way to listen to music on his PC. Apparently, so did several million other people.

As the shareware checks for Winamp piled up, Frankel kept hacking. While big software companies elephant-walked in circles trying to develop online music distribution systems, he created Shoutcast, an MP3 server that streams music over the Net. Winamp and Shoutcast became the default way to play, drawing tens of millions of fans in less than two years. That’s when AOL rewarded Frankel by buying Nullsoft for $100 million in 1999.

Lots of geeks who couldn’t make it through engineering school became multimillionaires in the boom. But Frankel remained an unreconstructed kid in a field of hackers-turned-entrepreneurs. Like Kurt Cobain, he used his money to challenge the people who gave it to him. As AOL was merging with Time Warner in March 2000, Frankel published Gnutella, a peer-to-peer file-sharing system that addressed the fatal flaw in Shawn Fanning’s Napster. Fanning relied on a bank of central servers that would eventually be shut down by record industry lawyers. Gnutella, by contrast, was completely decentralized. The only way to shut it down would be to go after every single user.

When Frankel posted Gnutella on Nullsoft’s site it came with a cheeky, half-apologetic note: “See? AOL can bring you good things!” AOL was not amused; they had him remove the program immediately and disclaimed it as an unauthorized side project. But Gnutella had already been spread around the Net and reverse-engineered by eager programmers who set to work improving Frankel’s gift. Years after Napster’s servers went dark, Gnutella traffic is still growing.

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