Music label Razor & Tie Entertainment, knwon for its Kidz Bop compilations, has dropped its lawsuit against Limewire, according to a story from Billboard.biz. Razor & Tie had sued Limewire about a year ago, at the time calling the file sharing software "a breeding ground for copyright infringement of unprecedented magnitude."

What led to the change of mind? Limewire and Razor & Tie wouldn't tell Billboard any details about the new withdrawal of the lawsuit, but Limewire CEO George Searle told the music industry publication that he views conflicts like this one not as legal issues, but business issues. In other words: Limewire promised Razor & Tie something that made financially more sense than a full-blown legal war.

Limewire has been steadily working towards partnerships with music labels in recent years. The company opened its own music download store early last year and integrated the store front directly into its client last December.

However, Limewire doesn't just want to sell a few MP3s to file sharers. The company also has ambitious plans to launch a pay-per-click contextual advertising network in its client and on its growing list of web properties. The network is supposed to share its revenue with musicians and record labels. Searle introduced these plans 16 months ago at a DCIA event in Los Angeles, and the company has since followed suit by trying contextual ads within Limewire to promote its own download store.

Limewire has been keeping mum about the launch date of its ad network, but the company has been operating a new stealth subsidiary based in Sunnyvale for around a year. The end of the Kidz Bop lawsuit could mean that Limewire is ready to roll out contextual ads on a wider basis rather sooner than later

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