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Loudeye snags antipiracy start-up

The digital music services provider acquires Overpeer, a company dealing in antipiracy services for record companies and digital content distributors.

Loudeye, a digital music services provider, said Tuesday that it has acquired privately held Overpeer for its antipiracy tools and services.

Under the deal, the company is taking over New York-based Overpeer for about 1.7 million shares of Loudeye common stock. That values the deal at just under $4 million, based on Loudeye's closing price Monday.

Loudeye said Overpeer's products such as antipiracy services and data-mining and promotional tools will be meshed with its products and services for media companies.

Overpeer's data-mining tools are designed to let online music companies keep an eye on real-time downloading across file-sharing networks and take action to curb copyright infringement, Loudeye said. Last month, Overpeer recorded 25 billion digital download hits, blocking illegal copying of material across 150 million unique user sessions, Loudeye added.

Loudeye teamed up with Microsoft last year to promote its service that helps other companies set up online music stores much like Apple Computer's iTunes. Loudeye asserts that there is room for an intermediary in the business despite the tiny profit margins, so it is looking for customers interested in digital music distribution as a promotional tool for another products or services, rather than as a standalone business.

"Overpeer's strong technology and products are a natural fit with our digital music and media solutions, and we share a common goal of driving legitimate digital media revenue and monetizing content across all digital distribution channels," Loudeye Chairman Anthony Bay said in a statement.