Kuro, previously Taiwan's largest peer-to-peer network, launched on Jan. 1 a new Web site featuring a music-download service provided by Ezpeer, another local download service.

Kuro Web manager Patrick Cheng says the two companies are now talking with Yahoo-Kimo Music, Yahoo's local download site, with a view to launching a joint site to integrate resources and maximize their user base in Taiwan's relatively small market.

"We are still in a transition period, and the current site serves as a platform to tell music fans that Kuro is now legal," Cheng says, adding that the three firms could set up a joint site by mid-February.

Industry observers say that with the addition of Kuro, Ezpeer and Yahoo would be well-placed to challenge KKBOX as Taiwan's biggest streaming and music-download service.

Kuro closed its copyright-infringing P2P service in October as part of the terms of its $9.1 million-settlement with the IFPI the previous month. Since then, Kuro users have been redirected to Yahoo-Kimo Music to use their unused credits in Kuro. That time-limited marketing campaign ended Dec. 31.

Before the shutdown, Kuro boasted 400,000 members. KKBOX has 2 million registered members, including 200,000 who pay monthly subscription fees. Yahoo-Kimo Music and Ezpeer decline to say what their sales are and how many subscribers they have. Yahoo-Kimo Music said last March that it hoped to secure 100,000 paid members by the end of 2006.

Dennis Yang, director of Yahoo-Kimo's entertainment business service, says that before the three-way alliance can become a reality legal issues regarding licensing agreements with record companies and other rights holders and whether the alliance complies with Yahoo's global service policy or not need to be dealt with. Ezpeer declined to comment on the proposed alliance.