News 

Revenues rose by nine per cent compared to the same quarter last year, enabling the music service to cut its losses by 33.8 per cent to $9 million.

Subscriber numbers rose 15.6 per cent, but the chief source of increased income was the company's ad-supported free music service.

'We're pleased to report that Napster.com's unique visitation grew 42 per cent in the second quarter, which provides us with the opportunity to continue to grow our new ad-supported free music service and simultaneously deliver positive paid subscriber growth throughout

ADVERTISEMENT

the balance of our fiscal year,' said Chris Gorog, Napster's chairman and chief executive officer.

Gorog added that he expects Napster Mobile to increase revenues over the coming months.

'We believe the dramatic growth projected for music-enabled cell phones will provide a very significant growth driver for Napster going forward,' he said. 'Our recent launches with Cingular and DoCoMo, two of the largest wireless carriers in the world, provide us with a great jump-start into the mobile market and will make Napster's subscription service and mobile offerings available to over 100 million mobile customers.'

He said that the company will be announcing additional carriers before the end of the year.

Napster recently hired an investment bank to examine its future options: either a partnership with another firm or the sale of the company, with Google, portable music player makers such as Samsung and Creative or mobile phone businesses thought to be likely suitors.