Losing to Rivals, Musicmaker.com to Shut Down Service, Sell Assets

Musicmaker.com Inc., which allows music fans to make customized compact discs online, decided to shut down and sell its assets because it is unable to compete against rival free services such as Napster Inc.

New York-based Musicmaker.com decided to seek shareholder approval to sell its assets after it was unable to find a buyer willing to purchase the money-losing business for more than $32 million, about the amount of cash it had at the end of the third quarter.

“I used to say you’ll either end up being the next CD or the next eight-track. It looks like I’ll be the next eight-track,” said Chief Financial Officer Mark Fowler. The move comes after the company was unable to compete against Napster and other services that distribute music over the Internet for free, Fowler said.

Trading in Musicmaker.com shares was halted on the Nasdaq Stock Market ahead of the announcement. The shares had fallen 6 cents to $2.88.