Playlist.com files for Chapter 11

Formerly known as Project Playlist, the digital-music service says it will continue to operate and expects to come out of the bankruptcy protection period in better shape.

Music service Playlist.com, formerly known as Project Playlist, has filed for Chapter 11, the start-up said Friday.

Playlist.com founder Jeremy Riney. Greg Sandoval/CNET

"The company expects to conduct business as usual and emerge from Chapter 11 as quickly as possible," Playlist said in a statement.

In July, CNET reported that the company had run into money trouble and was looking for funding .

Playlist.com enables users to create and share digital music playlists with friends. A couple of years ago, the service had built a reputation as a potential challenger to some of the other ad-supported music services, such as MySpace Music and Imeem. An embarrassing management shake-up followed, when then-CEO Owen Van Natta, the well-known former Facebook executive, resigned after only five months on the job to become MySpace CEO . (Van Natta then left MySpace after less than a year .)

Two of the four major recording companies also filed copyright suits against the service. Those suits were eventually settled out of court.

Playlist never really got going for those reasons, and it's hard to have much hope for the company's future when most of digital music seems mired in a stagnate period. Few, if any, digital-music companies are attracting big audiences or stirring much excitement.

In the past 18 months, Imeem and iLike were acquired by MySpace , and SpiralFrog and Ruckus shut down . MySpace Music hasn't lived up to billing . Spotify can't quite make the jump to the United States. The best we can hope for is that the music service Google is working on is special .

Sources in the music industry have told CNET that Google is working on a service that enables users to store and obtain music from the company's servers. Google could also link downloads to the company's powerful search engine.

Apple's iTunes, the reigning and mostly unchallenged digital-music leader, is also working on a cloud music service, but music industry insiders say Apple's cloud plans are focused on video more than music, at this point.

 

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