Napster CEO Resigns as Funds Dry Up

May 14, 2002 12:00 PM, Reuters


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SAN FRANCISCO (Reuters) -- Embattled Internet music company Napster Inc. announced Tuesday that its chief executive officer, Konrad Hilbers, had resigned and that it had been unable to secure funds to relaunch its once wildly popular song-swap service.

"We appreciate the contribution made by Konrad Hilbers as CEO of Napster," the company said in a statement. "We deeply regret that we have not yet been able to find a funding solution that would allow Napster to launch a service to benefit artists and consumers alike. We will be looking at additional steps in the coming week to further reduce expenses."

A Napster spokesman was unable to say immediately if the company -- a once hot property on the Internet, which has been struggling to relaunch itself as a royalty-paying service to comply with U.S. copyright law -- would file for bankruptcy.

Tuesday's announcement followed a decision by German media group Bertelsmann AG, which has taken a significant stake in Napster, to postpone talks to buy the rest of the company pending resolution of a dispute among other Napster investors.

The company, which has been grounded by legal squabbles since July 2001, last postponed the launch of its new secure service in March, and last month announced it was laying off about 30 people, or 30% of its staff.

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