Unfortunately it's not folding:
"The collapse of Kazaa, however, is not expected to slow trading activity on the company's network, one of the most popular file-sharing sites in the world. Kazaa said it has sold the network to another firm that the music and film industry has not sued yet.
The Web site and the software behind it are now owned by a privately held firm called Sharman Networks, based in Vanuatu, an island in the Pacific. "
source: <a href=http://sfgate.com/cgi-bin/article.cgi?file=/news/archive/2002/05/22/financial1929EDT0213.DTL#sections">AP</a>