James Delahunty
10 Dec 2005 9:51
Loudeye Corp. has announced that it is closing its anti-piracy / content protection unit Overpeer Inc. Overpeer is responsible for poisoning some of the world's biggest P2P networks with useless digital audio files that often just play 5 second loops of songs over and over (or intentionally corrupted files). The company has issued a press release detailing why it has taken this step. Here is the important part of it...
Seattle, WA — December 9, 2005 — Loudeye Corp. (Nasdaq: LOUD), a worldwide leader in business-to-business digital media solutions, today announced an important step in its effort to focus its business and reduce its cost structure. Loudeye announced that Overpeer, Inc., Loudeye's wholly-owned content protection subsidiary, has ceased operations effective immediately and will continue to pursue options to maximize the value of its assets.
As a result, Loudeye has reduced its quarterly consolidated cost structure by approximately $1.6 million, or 10%, compared to third quarter 2005 levels. Overpeer expects to incur approximately $200,000 in severance and related payroll costs associated with the closing of its operations, which is expected to be paid during December 2005. In addition, Overpeer may incur additional wind-down costs to terminate property or equipment leases, and other contracts. The cessation of the Overpeer operations may also result in the acceleration of depreciation or amortization or the impairment of certain fixed and intangible assets. Loudeye anticipates that the net assets and results of operations for Overpeer will be presented as discontinued operations in its consolidated financial statements.
"We continue to focus our business on growth opportunities with digital distribution. Our actions to exit content protection services will substantially improve our go-forward cost structure," said Mike Brochu, Loudeye's president and chief executive officer.