MP3.com Inc (Nasdaq: MPPP) shot up 30 percent in early trading Wednesday after a report that it was close to a deal with Warner Music (NYSE:TWX) that would include both damages for copyright infringement and a music licensing plan.
Shares in MP3.com were up 3 to 14 5/8, after recovering from a low of 6 1/2 in April.
MP3.com was hit by a copyright suit by the music industry after it started a service that allowed people to listen to digital copies of records they own, using a kind of virtual storage locker on its Web site. The stock resurged after announcing a licensing pact with BMI in May.
Terms of the arrangement were not available, but MP3.com is expected to pay Warner Music, a unit of Time Warner Inc. (NYSE:TWX), between $15 million and $20 million to settle the copyright-infringement claims, the Wall Street Journal reported. The newspaper quoted an unidentified source as saying the settlement may be announced as soon as Friday.
Other labels are also in talks with MP3.com, according to the article.
MP3.com Chief Executive Michael Robertson was travelling and not available for comment, and other MP3.com officials declined to comment, the newspaper said.
The company announced Wednesday that it had entered a partnership with ReQuest Multimedia Inc. to allow customers to access content and services on the MP3.com site from a home stereo "digital jukebox'' without the use of a PC.
The two companies said they will also work together to integrate MP3.com services into ReQuest Multimedia products and technologies.