March 23, 2001 4:05 PM PST
Digital music provider buys IUMA
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Under the deal, Vitaminic will acquire all the assets of IUMA including domains, artist databases, equipment and the registered trademark, Musicomania, which is owned by EMusic.com.
The agreement is the latest effort by IUMA to revive its services. Launched in 1993, the company was one of the first to tap into the online music scene, housing information and samples for hundreds of artists as well as dozens of labels on the Net. In 1999, the Redwood City, Calif.-based company integrated with EMusic.com and launched a redesigned site. But, as IUMA sought to help unsigned bands to promote and sell their music, it also fell on hard times, ultimately running out of cash.
Phil Leigh, vice president of digital media research at Raymond James and Associates, said that IUMA still has a recognizable brand name that could hold value.
"The main thing is to get attractive content combined with an attractive audience," Leigh said. "Depending upon what someone pays for IUMA, there is going to be an audience there. If they can operate it more economically than EMusic did, then maybe they can make it work."
Vitaminic said it will pay $400,000 in cash and will issue $500,000 in stock for the purchase.
Vitaminic, which has nine Web sites in Europe and one in the United States, said the acquisition will give Vitaminic's artists broad exposure in the United States, as well as provide IUMA artist exposure across Europe.
Founded in April 1999, Vitaminic provides a digital platform for promoting and distributing music over the Internet and other electronic networks, including broadband wireless technologies. In January, the company teamed with Sony to enable music fans to purchase secure, downloadable music.
"We were here first, and we are going to be here forever," IUMA founder Jeff Patterson said in a statement. "When we ran out of cash, the staff volunteered; when the staff became overwhelmed, the artists volunteered. We're supported by a community of 25,000 artists with a voice that grows stronger every day, and we are simply too passionate to let this community die."