Amazon.com Offers Access to Free Digital Songs

Amazon.com Inc. on Wednesday made its biggest push yet into music downloads, offering free songs from hundreds of artists such as Paul Simon and Pearl Jam as part of an effort to help spur slowing sales in the online retail giant’s important CD business.

Though the new offering from the Seattle-based company will not have the depth of file-swapping services offered by Napster, it is one of the broadest efforts yet by a major retailer to tap into the booming digital music phenomenon with the blessing of the recording industry.

“Basically, the goal here is to dramatically expand what we’ve done in the past and do it in a way that’s much more integrated with our existing store,” Greg Hart, group manager of Amazon’s music store, told Reuters.

Songs will be available in the popular MP3 format or a format from Liquid Audio Inc. that lets record labels--eager to protect copyrights--set limits on usage, such as making the song expire after a certain time.

Amazon’s music initiative comes as the company grapples with slowing growth in its core books, music and video business, which grew by just 11% last quarter--performance dubbed anemic by at least one analyst.

Chief Executive Jeff Bezos has announced a raft of changes in the company as he tries to make good on his pledge to turn a pro forma operating profit by the end of the year.

The company’s stock fell Wednesday $1.56, or 13%, to $10.19 on Nasdaq, partly in response to rumors sparked by a German business news wire that the company was planning to file for bankruptcy.

Amazon vigorously denied the rumors, saying it had more than enough money to last the year.

Amazon spokesman Bill Curry said the company started the year with $1.1 billion in cash and expects to finish the year with $900 million in cash.

“We’ve got piles of moola,” he said. “People just don’t pay attention.”