New York - Online entertainment site Bolt.com has agreed to pay several million dollars to settle a copyright infringement lawsuit with major record label Universal Music Group, The New York Times reported on Monday.

To pay for the settlement, the company has agreed to be acquired by rival GoFish, for as much as $30 million in stock.

Launched in 1996, Bolt counted 5.3 million U.S. users in December, while GoFish.com had 1.4 million users, according to ComScore.

"This deal is economically painful to Bolt shareholders," Bolt CEO Aaron Cohen told The Times. "It is setting a precedent that companies that violate copyright at minimum risk litigation."

Cohen also told The Times that, in addition to the settlement, the company will pay now royalties when Bolt users upload videos that contain music from Universal artists.

Similar deals with other labels, including Warner Music, are in the works.

Universal has also sued News Corp.'s MySpace and Sony's Grouper -- both sites that also allow users to post videos -- for copyright infringement.

Related Links:

http://www.nytimes.com/2007/02/12/technology/12bolt.html

http://www.bolt.com

http://www.gofish.com