LimeWire is adapting its model to show how P2P is still a legitimate business investment. But is adding social networking and becoming more feature rich the right fix?Peer-to-peer networking is making a comeback of sorts thanks to software as a service (SaaS) and cloud computing distribution models. Even Web 2.0 principles are founded on third-party relationships that decentralize information where subscribers can then cherry pick a multitude of widgets, apps, and even small files.

So, it should come as no surprise that LimeWire (run on top of the Gnutella Network) is hoping to attract the right kind of attention by adding social networking services to its basic structure.

The company on Friday said it is close to releasing version 5.0 of its software in beta. The update is expected to let users "set up personal networks based on existing contacts and exchange information selectively with their friends." The company also emphasizes the phrase "limited distribution" in the press statement to separate itself from the same troubles that befell Napster and Grokster.

Run down the laundry list of features expected in v5.0 and you see some departure from the original undistributed P2P model. For example, LimeWire 5.0 should be able to integrate buddy lists from Jabber-compatible services. Users are expected to also see an improved user interface, tightened security, better ability to manage shared files, speedier downloads, and a more comprehensive search engine.

But you have to ask, why now? And why throw in additional features if the standard LimeWire Basic and LimeWire Pro product boasts more than 70 million unique monthly users, 350,000 downloads per day, and about 5 million active users at any moment?

The key may be a need to bolster the LimeWire Store, which sells DRM-free MP3 downloads a la carte or through subscription plans.

MySpace, which dominates the social networking space, has thrust itself into the music business. While LimeWire may not have the skills to put a social networking face on its product, it does have the infrastructure model and delivery pipes that made it a viable alternative to Napster and Grokster in its day.

But if LimeWire wants to become feature rich, it should be blatantly apparent which direction it wants to take. Plus, online music sharing is profitable (read Apple iTunes) but there is so much more potential in P2P that wasting the pipes on music seems to cheapen the technology.

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