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Internet music company Liquid Audio, Inc. (Nasdaq: LQID) has jumped into the bidding for bankrupt Scour, the online entertainment venture backed in part by Hollywood heavyweight Michael Ovitz.
Liquid Audio, based in Redwood City, California, said it is filing a bid for Scour's technology assets, including its peer-to-peer file-sharing application, with the U.S. Bankruptcy Court in Los Angeles.
Bidding War?
The announcement raises the stakes for Listen.com, which last month said it would buy Scour's assets, subject to bankruptcy court approval. Scour president Dan Rodrigues said at the time that the sale of the company's assets to Listen.com would be "in the best interest of all of the company's constituents."
'Logical Extension'
Liquid Audio said that integrating Scour's technology into its own music
distribution system would enable the more than 1,000 retail 
sites in the
Liquid Audio global distribution network to add music-sharing services.
Music e-tailers including CDNow, Best Buy, TowerRecords.com, HMV and Musicland use Liquid Audio software and services.
"Peer-to-peer capabilities are a logical extension of our secure music distribution system," said Liquid Audio co-founder and chief executive officer Gerry Kearby. "Our goal is to enable our network of retailers to offer subscription services, including peer-to-peer downloads, that complement their online music stores."
Bankruptcy Protection
Los Angeles-based Scour filed for bankruptcy protection in October after lawsuits from the music industry and a shakeout in the dot-com sector diminished the company's options.
In its bankruptcy filing, Scour said the move would allow it to evaluate its options and stay all pending litigation. The company had been sued by the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA) and the National Music Publishers Association (NMPA). Scour has said the suit is without merit since its music and video files are shared by individuals.
In mid-November, Scour shut down its file-sharing exchange, saying that doing so would "help ease the sale" of its technology and assets.
Listen.com Has Backing
San Francisco-based Listen.com, which distributes digital music and runs an Internet radio service, enjoys financial backing from BMG Entertainment, EMI Recorded Music, Sony Music, Universal Music Group and Warner Music Group.
Listen.com chief executive officer Rob Reid said his company "can develop Scour's assets into a means to distribute multimedia content in a way that respects rights holders." Listen.com products are syndicated and sold to portals and Web sites such as Yahoo! and AltaVista, which use them in their music sections.
Another company, CenterSpan, has also reportedly entered a bid for Scour's assets.
In addition to its file-sharing assets, Scour has an entertainment
search site and an online radio community.
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