By Kate Hanaghan, 12 April 2002 16:45
NEWS Napster bosses have been forced to make another round of job cuts as the controversial file-swapping service teeters close to the brink of collapse. Against a backdrop of legal suits which forbid Napster from running its service, founder Shaun Fanning has had to make 30 people redundant. It is estimated that this latest round of staff cuts reduces headcount by a third. Rebecca Ulph, media analyst at Forrester Research, argued this latest round of losses shows "Napster doesn't have much longer left". For the past 18 months Napster has been living off loans from music giant Bertelsmann totalling somewhere in the region of $100m. Last week Thomas Middelhoff, CEO of Bertelsmann, confirmed to German press that the company intends to take full control of Napster - something Mark Mulligan, analyst at Jupiter MMXI, claimed represents Napster's best chance of survival. However, some analysts are not convinced the takeover will definitely go ahead, considering Napster's complex and potentially very expensive legal issues. Jupiter's Mulligan told silicon.com: "Napster needs Bertelsmann more than Bertelsmann needs Napster." The streamlining of staff numbers, he said, is a traditional move made prior to a takeover and would make Napster look a more attractive prospect for Bertelsmann. But he claimed the redundancies might simply be a sign of the company shedding the additional staff it took on to implement filtering software in the wake of legal actions.
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