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Loudeye Technologies (Nasdaq: LOUD) rose 2 U.S. cents to 82 cents in morning trading Wednesday after the company, which provides digital Internet audio and video content services, announced a restructuring that includes laying off 45 percent of its 300-person workforce.
Loudeye said it will focus on "aggressively exploiting" its advanced digital music archive and related distribution technology. In coming weeks, the company said, it will begin new initiatives that could include reducing or outsourcing some "non-core" business operations.
The restructuring will result in a cash charge of about $2.5 million to second-quarter results, as well as a "substantial non-cash charge" for related asset writedowns. The plan, however, is designed to save about $12 million per year.
"As the emerging market for digital music distribution begins to unfold, Loudeye is focused on developing sustainable, scalable revenue streams," said chief executive officer John T. Baker. "I am confident that Loudeye, with the resources to move aggressively and opportunistically, is well positioned for success."
Baker became president and chief executive officer last month, replacing David Bullis, who resigned.
Last week, Loudeye said it bought the online radio application technology and some infrastructure assets of OnAir Streaming Networks of Irvine, California.
Loudeye went public in March 2000
at $16 per share, and soared to $40 in its first day
of trading. Last week, the shares sank to a 52-week low of 50 cents. The
company, based in Seattle, Washington, said it will consolidate its four
offices there into its headquarters operations.
