MP3.com to close Europe "by mid-August"

Following our breaking story last week, silicon.com can reveal that online music download site MP3.com will close its European operations next month with the loss of 20 jobs.

A spokeswoman for MP3.com Europe at its London-based offices said the closure will not affect the US operation.

She told silicon.com: "We are closing MP3.com in Europe and we will cease to do business by mid-August."

The company was bought by media giant Vivendi Universal for $372m in May 2001 but has struggled to gain users to subscribe to its paid-for music services while free alternatives such as Kazaa are still available, and Vivendi is looking for buyers for the US business.

MP3.com floated for $344m in July 1999 but soon landed itself in hotwater in legal battles with record companies over copyright infringement and was forced to pay Sony $20m in damages in August 2000 in an out of court settlement. It was then ordered to pay $250m to Universal music for the same offence.

Vivendi Universal bought the troubled company for $5 a share in 2001 but MP3.com has failed to make a profit.