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EMusic.com gains on branding deal with AOL

EMusic.com shares rallied up 1 3/8, or 26 percent, to 6 11/16 Wednesday after announcing it will introduce co-branded Web sites with three of America Online's Web site brands.

EMusic.com, which has a digital catalogue of more than 90,000 music tracks, will provide MP3 format music on AOL's (NYSE: AOL) online communications service ICQ, its online music service Winamp and on Spinner.com.

"These new sites will make it even easier for ICQ, Winamp and Spinner users everywhere to discover and listen to new music," said CEO Gene Hoffman in a prepared release.

ICQ has 50 million registered users worldwide, Winamp is a high-fidelity audio player and Spinner.com offers 130 music channels.

EMusic offers individual tracks for 99 cents each or entire albums for $8.99.

In its latest quarter, EMusic.com beat Street estimates when it posted a loss of $8.2 million, or 27 cents a share, on sales of $424,000.

In the quarter, its sales of downloadable music increased to $206,000, a 390 percent increase compared to $42,000 sold in the preceding quarter.

First Call consensus expects EMusic.com to lose 32 cents a share in its third quarter and $1.41 a share in the fiscal year.

Its shares moved up to a 52-week high of 35 in September before falling to a low of 5 3/16 earlier this month.

All six analysts providing coverage of the stock maintain either a "buy" or "strong buy" recommendation.