No More Encores for Musicmaker.com

Musicmaker.com (www.musicmaker.com), a site featuring custom CDs and downloadable music, has announced its liquidation. The company's board of directors approved the liquidation plan on January 3, citing limited financing available to the online music and e-commerce sectors. The company said it was unable to find a buyer or partner "willing to offer greater value than that expected to be derived from liquidation."

Musicmaker's share price has sunk to $2.88 from a July 1999 high of $281.55 as a result of stock-market uncertainty caused by the Napster trial. Musicmaker's business model was based upon e-commerce rather than Napster's file-sharing protocol, but suffered along with other companies in the online music sector as a result of controversies regarding intellectual property rights, said analysts.

In November, Musicmaker announced a reduction in its cash burn-rate as a result of staff cuts and a plan to investigate other business models, including a B2C business for jazz and classical music fans. The company also executed a 1 for 10 reverse stock split to salvage market confidence.

"This is clearly a tumultuous time for both the music industry and the e-commerce industry", said CEO Raju Puthukarai, on the restructuring.