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Music site takes another shot at its sales approach

Associated Press / October 21, 2008
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LOS ANGELES - First a CD-trading site, then a free Web-based music browser, lala.com is being born again.

The site is relaunching today as a hybrid, offering the digital download functionality of iTunes and the free music streaming of MySpace Music without the ads.

The Palo Alto, Calif.-based company, backed by $35 million in venture capital from Bain Capital LLC, Ignition Partners, and Warner Music Group Corp., first launched in July 2006.

Its first version lacked scale and the second was met by numerous me-too players from MySpace and iMeem to Last.FM, said cofounder Bill Nguyen.

This time around, listening to any of the 6 million tracks at lala .com will be free. It will cost 10 cents to put a song in a Web locker for unending access on any computer where the user logs in.

Another 79 or 89 cents allows the user to download an MP3 track, with no digital rights management coding.

Because the site is ad-free, the business relies on selling Web tracks and MP3s.

"Where we get into trouble is if we do a lot of streaming and we don't sell music," Nguyen said.

Users of lala.com's test site - who number nearly 300,000 - are buying enough music to put the site on the path to profitability.

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