June 14, 2005

Spanish Firm Aims to Revolutionise Online Music

MADRID -- A Spanish Internet start-up that tracks how people listen to music on computers and other devices hopes to profit from enhancing the success of the online music business, its chairman said on Tuesday.

MusicStrands aims to grow by using its exclusive new technology to delve into listeners' computers, mobile phones or i-Pods to help determine their preferences, not just what they purchase, and make recommendations.

"You can have fairly crude forms of recommendation technology, which is just if someone picks A then you recommend B," Chairman Derek Reisfield told Reuters. "We are going to the next level. We can personalise the recommendation.

"We'll look at your hard-drive and see what's out there and make recommendations based on your music library," said Reisfield, a former president of CBS New Media.

"We look at actual behavior patterns in terms of usage, not just purchases."

The technology can make selections based even on the time of day or the type of music the user typically listens to following another type of music, he said. The company asks its members for permission before accessing their files, he said.

A third of the company's 30 employees have doctorate degrees, including Andreas Weigend, the former chief scientist at Amazon.com Inc. from 2002 to 2004.

Musicstrands offers its service free to users via its Internet site. It earns revenues by licensing its technology to other companies and by making referrals to online music stores such as Amazon.com and Buy.com Inc. For each referral that turns into a sale, it collects a fee.

The company, which launched its Web site in February, aims to have revenues in seven figures next year and to turn a profit within three to five years.

"Creating the surprises of a physical shopping experience is very difficult on the Internet, and that is something we want to address," said Reisfield. "We want to give people different ways to navigate."

Microsoft Corp., the world's largest software maker, said last week it was interested in offering an online music subscription service. It launched its MSN Music download service last year to rival Apple Computer Inc.'s iTunes.


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