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Tech Industry

CDNow misses Street estimates in fourth quarter

    Online music retailer CDNow Inc. (Nasdaq: CDNW) missed analysts' estimates in its fourth quarter Thursday, losing $25.7 million, or 85 cents a share, on sales of $53.1 million.

    First Call consensus expected it to lose only 80 cents a share in the quarter.

    CDNow shares closed off 1/2 to 11 5/8 ahead of the earnings report.

    The $53.1 million in sales marks a 154 percent improvement from the year-ago quarter when it lost $12.9 million, or 73 cents a share, on sales of $20.9 million.

    For the year, it lost $119.2 million, or $4.32 a share, on sales of $147.2 million compared to a loss of $43.9 million, or $2.79 a share, on sales of $56.4 million in fiscal 1998.

    "CDNow wrapped up 1999 with, by many measures, our strongest quarter ever," said CEO Jason Olim in a prepared release. "Revenues grew substantially both year-over-year and sequentially."

    While CDNow's sales did jump 154 percent from the year-ago period, it still fell 47 percent shy of the total music sales Amazon.com Inc. (Nasdaq: AMZN) recorded in this quarter. Amazon.com did $78 million in music sales, up 136 percent from the year-ago period.

    In the quarter, CDNow's advertising sales rose to $3.4 million, up from $2.6 million in the third quarter.

    CDNow averaged 821,000 daily page views in December, up 178 percent from the year-ago period. Repeat customers accounted for 60 percent of its total sales, compared to 56 percent a year ago.

    Separately, CDNow named Michael Krupit, currently the company's chief development officer, to the new position of chief operating officer.

    Its shares have struggled mightily of late, falling to a low of 8 1/2 in January after peaking at 24 15/16 last February.

    Two of the three analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.