San Diego, Jan 27 (ExpressIndia) -- mp3.com Inc. on Wednesday posted a fourth quarter loss that beat Wall Street estimates as revenues rocketed twenty-fold, powered by advertisers' enthusiasm for the Internet music Web site, reports Reuters.
The San Diego, Calif.-based company said that in its fourth quarter ended Dec. 31, it lost $10.6 million, or 17 cents per share, excluding charges, compared to a break-even performance a year earlier. Analysts had expected the company, which boasts a quarter of a million songs by mostly unsigned musicians for free download over the Internet, to lose 23 cents a share, according to First Call/Thomson Financial.
The better-than-expected results pushed MP3.com's stock higher in after-hours trading, where it rose 1-5/8, or more than 5 percent, to 31-5/8. In regular trading on the Nasdaq, the company slipped 1 to $30 a share. Revenues soared to nearly $15.3 million in the quarter compared with just $613,000 a year earlier, fueled by advertising revenues that nearly quadrupled from the previous quarter, it said. Including non-cash charges related to a minority investment in mp3radio.com, a joint venture with cable TV operator Cox Communications Inc. (NYSE:COX - news), the loss totaled $14.86 million, or 23 cents a share.
For the year, MP3.com said it lost 67 cents a share, compared to a loss of 1 cent a share in 1998. The site attracted 519,000 unique daily visitors in December, and logged 97 million page-views it that month, it said, but did not provide year-earlier comparisons.
"MP3.com truly came into its own in 1999 and drove a stake deep in the ground as the one place on the Internet where, within minutes, consumers can discover, purchase, listen to and organize their music collection from any location, at any time,'' chief executive Michael Robertson said in a statement.
The company takes its name from the MP3 format that is the most popular way among consumers and amateur artists to encode music to store on a PC or send over the Internet. However, it does not own any rights to the MP3 technology, and there are several formats by companies such as Microsoft Corp. (NasdaqNM:MSFT - news) and Liquid Audio Inc. (NasdaqNM:LQID - news) that are gaining more favor with record companies because they can protect against unauthorized copying. Nonetheless, the company has built itself into one of the best-known music brands on the Internet, offering not only songs but merchandise and CDs for sale, and a suite of software tools aimed at augmenting how people listen to music online.
"Our world-class technology infrastructure made this growth possible,'' Robertson said. MP3.com's balance sheet showed its coffers were stuffed with more than $100 million in cash, which Robertson said would help it expand its user base and swelling catalog of music. "We will continue to invest and build this technology infrastructure in 2000 to manage and deliver the world's largest database of music,'' Robertson said. "We believe our cash reserves, our enviable brand equity, as well as our strategic vision and content scalability should well pave the way for continued growth,'' he said.
But MP3.com's aggressive push to try to revolutionize the music business and provide all music to everyone at anytime has landed it in hot water with record labels, which are eager to guard their share of the $40 billion music market. Last week, the Recording Industry Association of America, the sector's trade group, sued MP3.com for copyright infringement, alleging it illegally compiled a database of 40,000 albums for some new personalization features on its site. Robertson has vowed to fight the suit.