Timing is everything in business, and having a visionary idea too early can prove fatal. So it is with Shawn Fanning’s Snocap, which has formally announced today that it’s being acquired by Imeem. Or what’s left of it – most Snocap employees were laid off last year, with Fanning long gone.

Snocap was created to provide the mechanics and infrastructure for a “legal P2P” system based around collective licensing. There were two parts to the masterplan: a database of artists, and watermarking technology which permitted network operators to track the flows of songs around networks, so rights holders could be compensated according to usage.

That was a prophetic and incredibly far-sighted decision to take in 2002. But it’s only now the major labels are even contemplating a collective licensing regime. Long time copyright reform advocate Jim Griffin has been hired by Warner Music with the first goal to license US universities, we reported here.

Silicon Valley VCs are notorious for not understanding “old” media businesses, and most wish they would simply go away. (They’re not alone in lacking the vision thing: Ars Technica first described Snocap with the headline “Fanning behind new, pointless P2P scheme. So what should have been the cornerstone for the biggest change in copyright in 100 years won’t be around to reap the rewards.)

And for their part, many in the music business now regret not licensing Fanning’s first venture, Napster. Counting was so much easier.

Snocap was sidetracked from the masterplan, licensing music and building digital stores. The database registry has seven million songs, the company says.

Terms of the deal were not disclosed.