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Listen.com cuts 25 percent of staff

The online music directory lays off 42 employees, becoming the latest casualty of financial woes in the Net music world.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
2 min read
Online music directory Listen.com laid off close to 25 percent of its employees Wednesday, the latest casualty of financial bleeding across the Net music world.

Listen, once one of the brightest stars in the online music business, has spent the last several months recasting its business model to adapt to the influence of Napster and other shifting market trends.

Originally designed as a standalone directory to legal music on the Web, the site won financial support from all five of the major music labels. As Napster began to capture online music seekers' imagination, Listen began moving toward a syndication model, selling its directory services to other sites like Excite@Home and Lycos.

That drive has helped the company remain comparatively secure financially, while others have shut their doors. The last few months have seen Listen purchase failing Net radio service WiredPlanet and bid unsuccessfully on the file-swapping assets of bankrupt Scour.

But the company hasn't been able to ward off the winds that have chilled new investment and revenue growth throughout the space. Chief executive Rob Reid said on Wednesday that the company was laying off 42 employees, or about a quarter of the company.

"The realities of the market, the changes in our business model and the need to minimize the time it takes to reach profitability all factored into this decision," Reid said. "But, this doesn't change the fact that this is a very difficult step to take."

The company said it would now have "roughly three times" as much money as it needs to reach profitability sometime next year. The consumer site will be maintained, but marketing resources will largely be directed to the syndication business, a representative said.