SEATTLE—Loudeye Corp. said it has sold its U.S.-based digital music business to New York-based Muze Inc. for $11 million.
Muze, which is owned by Enterprise Partner Venture Capital, will take over Loudeye’s Web and mobile digital music technology including its encoding services. Loudeye said it plans to retain its Seattle headquarters but shift its focus to OD2, a Windows Media-based full-track music download service in Europe.
OD2 is the top seller of Windows Media-formatted full-track downloads in Europe, where Loudeye has teamed with carriers and online retailers to deliver digital music. Loudeye powers the mMode Music for Cingular Wireless L.L.C.; other carrier customers include KDDI and O2.
But the company suffered a net loss of $33.4 million last year and has struggled to streamline its operations and cut costs.
“This transaction is a continuation of our restructuring efforts to streamline operations, align technology platforms and significantly reduce our cost structure,” said Mike Brochu, Loudeye’s chief executive officer. “The cash infusion from the deal also strengthens our balance sheet.”
Shares of Loudeye dipped slightly on news of the sale, losing 2 cents to 48 cents per share by mid-day.
