The Sunday Times February 19, 2006
Tech giants like sound of digital firm
Paul Durman
MICROSOFT, Google and Amazon are potential bidders for Loudeye
Corporation, the digital-music firm based on a business created by
the rock star Peter Gabriel.
The three technology giants are all keen to expand in digital music,
and Loudeye could provide a springboard into the European market.
Loudeye has access to millions of songs from record companies, large
and small, and is the engine behind many European music websites,
including MSN, Virgin Megastore, MTV and MyCokeMusic.com.
It also handles back-office fulfilment functions for Apple's iTunes,
the dominant online music store.
Loudeye, an American company, acquired Gabriel's OD2 business just
over 18 months ago, but the company has struggled badly.
Mike Brochu, the Loudeye chief executive, said that he inherited "a
shambles" and has recently announced a wide-ranging restructuring
that has left the company largely focused on the original OD2
business, which is based in Bristol.
With less than $12m (£6.9m) to support the loss-making business,
Brochu is conducting a strategic review that is likely to lead to a
sale.
"Ideally, I would like to continue to build it," he said. "That
would be my wish. The pragmatic side of me says that if the right
opportunity came along from a strategic buyer, my first
responsibility is to the shareholders."
Brochu, who lives in Seattle, said he was not planning to move to
Bristol.
He added: "We've got a great catalogue (of music). We've done the
bulk of the heavy lifting. We've got a huge advantage over any new
entrant to the business. We've got a significant presence in the
European market."
The potential for online music is growing as mobile phones become
increasingly capable of acting as music players. Loudeye is already
working with Nokia and O2 Germany.
Loudeye's problems have caused its market value to fall to only
$77m, half what it was two years ago.
The potential sale has generate a huge volume of trading in its
shares.
Live for Today - Learn for Tomorrow
