The creators of the KaZaA file-sharing phenomenon, who went on to co-found the Skype peer-to-peer phone service, subsequently acquired by eBay, are working on a new network for online video distribution, codenamed The Venice Project.

Niklas Zennström and Janus Friis are apparently setting out to create a new distribution channel for television and video over the web.

Their first venture, the file-sharing system KaZaA, was hampered by legal threats from the recording and motion picture industries. Now they are negotiating with networks in a bid to become a dominant distributor of programming.

They join other companies currently using peer-to-peer distribution methods, including BitTorrent and Veoh Networks, as well as other online platforms such as Maven and Brightcove, not to mention the celebrated You Tube.

With the possible backing of eBay, they could even take on Google and Yahoo, which have yet to establish the same dominance in video as they have achieved in other online domains.

The Scandinavian duo are mainly contributing to business strategy, according to an article in Business Week, with others working on developing the operation.

Their second start-up, Skype, founded in 2003, offers free or low-cost telephone voice and now video calls over the internet and has attracted an estimated 100 million users worldwide.

Skype was acquired by eBay for $1.3 billion in cash and an equivalent in eBay stock in October 2005, and the co-founders still stand to earn a share of up to a staggering $1.5 billion performance bonus from eBay over the next three years.

Details of The Venice Project are understandably limited at this stage, but an announcement could be expected in the autumn.

www.skype.com