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Online music firm Liquid Audio sets splashy IPO
By Scott Hillis
(Courtesy:Reuters via Yahoo)
LOS ANGELES, May 5 (Reuters) - Internet music firm Liquid Audio Inc. said on Wednesday it planned to go public in the next few months as its moves to become a major player in delivering digital music online.
Redwood City, Calif.-based Liquid Audio said it had filed with the Securities and Exchange Commission for an initial public offering of common stock.
Company executives were unavailable for comment, due to the mandated ''quiet time'' before an offering, but the shares would likely start trading on Nasdaq in late June or early July.
Liquid Audio declined to say how many shares would be offered or how much it expected to raise, but said the funds would be used to build out its music distribution network.
The IPO was expected to generate intense interest among investors whose enthusiasm for Internet-related stocks has created incredible valuations for many newly public technology companies.
''Over the last several months it's been proven that investor appetite for Internet IPOs is almost insatiable,'' said Michael Kim, an analyst with Wedbush Morgan Securities.
Launched in 1996, Liquid Audio has attracted a total of $30 million in private investment. Stakeholders include PC chip heavyweight Intel Corp. (INTC - news) and Microsoft Corp. (MSFT - news) co-founder Paul Allen's Vulcan Ventures.
The company's Liquid Music System can encrypt digital music so that it cannot be copied illegally -- a key condition for securing support of artists and record companies alarmed by how easy the Internet has made piracy.
The system is one of several digital music formats that hopes to lure the backing of major record labels to enable the mass distribution of CD-quality music over the Internet on to PCs and portable playback gadgets.
In recent months the company has shifted more attention to building out a music distribution network, and now boasts some 240 sites that offer songs using its technology.
Major recording companies are taking Liquid Audio seriously and firms like BMG and Rounder Records are using its technology to reach consumers over the Internet.
But the IPO is certain to put the start-up head to head with software goliath Microsoft and telecommunications giant AT&T Corp. (T - news), which are pushing their own digital music formats.
Liquid Audio also faces a challenge from MP3, a digital music format that employs no copyright protection but has won major support from consumers for its ease of use and availability.
Liquid Audio also offers a secure version of MP3.
The offering will be managed by Lehman Brothers, BancBoston Robertson Stephens and U.S. Bancorp Piper Jaffray.
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