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Wednesday, July 21, 1999 Published at 21:34 GMT 22:34 UK

Business: The Company File

Music site is a market hit

The company plans to float on the Nasdaq

Heavy interest in the flotation of one of the Web's best known music resources has helped push its estimated share value up to $4bn in its first day of trading - almost as much as rival music giant EMI.'s initial public offering of 12.3m shares has jumped from a forecast price range of $9-$11 a share in late June to $24-$26 ahead of Thursday's initial trading on the Nasdaq stock market. But when the shares opened for trading, they jumped to $103, before closing at $63, a gain of 200% on the day., named after the technology used to compress music into high-quality downloadable files, has around 325,000 visitors a day to its site.

It offers a library of around 100,000 songs - mainly from unsigned or obscure bands - which users can listen to or download.

Piracy conflict

The flotation comes after the success of the first two Internet-related music companies to go public.

The share price of music software company Liquid Audio doubled on its first day of trading on 9 July., which contains a library of songs for users to compile onto a customised CD, rose 71% on its first day. It has signed a deal with EMI to distribute its back list. has come into conflict with the record industry - defending the MP3 format - which is a standard not confined to this site - against charges that it will create mass piracy over the Net.

The company made operating losses of $220,000 last year.

It made a loss of $1.5m in the first quarter of this year - largely due to expansion and spending prior to the stock offering.

Good business

Many analysts believe that music will be one of the first types of media to migrate fully to the Web.

The big music companies are already rushing to develop music sites on the Internet.

But with its name recognition, MP3 is likely to be a success with the public.

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