Struggling media titan Vivendi’s Universal Net division is understood to have taken the decision to close down MP3.com Europe.
According to a leaked memo, the music distribution website based in London will cease trading on 8 August. It is understood that the decision to close the company came as a result of an accelerated restructuring schedule within Vivendi Universal Net.
Vivendi is struggling with a crippling debt taken on in a bid by former CEO Jean-Marie Messier to transform a sleepy French utility into a modern media titan, straddling the Internet, television, music and publishing.
In 2002, the company recorded a net loss of about US$26bn (€23.3bn) on sales of close to US$32bn. The company said it hopes to become profitable in 2003.
Since its launch two years ago, MP3.com Europe established itself as one of the leading online destinations for music in Europe. A favourite of music fans and emerging artists alike, MP3.com features streaming and downloading music from more than 250,000 artists and 750,000 songs.
Vivendi acquired MP3.com in 2001 for US$372m and it is understood that Vivendi is planning to sell the American division of MP3.com as well. According to sources, analysts don’t believe that Vivendi will regain even a percentage of the original buying price.
By John Kennedy