Listen.com to Buy Streaming-Audio Site

Marking its first acquisition, online music directory Listen.com has agreed to buy WiredPlanet, a provider of customizable streaming MP3 stations.

Although the terms of the deal were not disclosed, a source familiar with the transaction said WiredPlanet's asking price was in the range of US$1 million to$1.5 million. In addition to programming radio channels in genres such as garage, ambient and experimental, WiredPlanet provides Web sites, record labels and other content owners with tools that allow them to program their own stations. For example, on the promotional site for the new DreamWorks film Almost Famous, WiredPlanet powers a station of "music that inspired the movie," which features a selection of early '70s tunes that include everything from Black Sabbath to Joni Mitchell.

Listen.com President Sean Ryan says "most" of WiredPlanet's staff will be given jobs at Listen.com. Meanwhile, Listen.com's current editors will start programming radio stations to go along with WiredPlanet's music genres.

The acquisition signals a further shift in Listen.com's business strategy toward becoming a private-label content syndicator. Listen.com launched last year as a sort of Yahoo Inc. for music, a consumer directory of digital downloads available on the Web. But the company also has been working a business-to-business angle, charging sites such as Yahoo, Lycos Inc. and AltaVista Co. to incorporate co-branded versions of its directory.

With the acquisition of WiredPlanet, Listen.com plans to add streaming audio to its existing syndication offerings, throwing Listen.com into the ring with players such as OnAir.com, RadioAMP and RadioWave, the latter of which is rolling out radio stations for ArtistDirect, RollingStone.com and MSN. Ryan hints that forthcoming Listen.com offerings could include music videos.

"We are looking to build a digital-media experience," he says.

While the majority of Listen.com's revenue still comes from advertising on the destination site, Ryan says the company increasingly will rely on income from syndication deals, as well as from ads sold across its network of partner sites.

The WiredPlanet acquisition bolsters Listen.com's syndication offerings, but it also points to the increasing difficulties of independent survival among online music startups. Investors have been particularly wary of digital music ventures amid the record industry's high-profile copyright battles with MP3.com Inc., Napster Inc. and Scour.

WiredPlanet, for its part, managed to close a round of VC funding late last year, led by Amicus, Angel Investors, Arba Investment Group and New Millennium Partners.

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