MP3.COM REVENUE JUMPS
TO $20.2 MILLION

Online music company MP3.com reported revenue jumped ten-fold to $20.2 million for its second quarter ended June 30, but its losses exploded to $177.1 million mainly due to a $150 million charge for costs associated with major label lawsuits against the company.

MP3.com also took a $22 million write-down for its investments in private companies, which have lost value.

Pro forma net loss for the quarter was $5.2 million ($.08 per share), narrowing from $6.3 million ($.22 per share). The loss skyrockets to $177.1 million ($2.71 a share) when the lawsuit and investment charges are included. In June, the company settled its case with Warner Music Group and BMG Entertainment and licensed their respective music catalogs. MP3.com is still negotiating settlements with Sony Music Entertainment, EMI Recorded Music and Universal Music Group.

The company's second-quarter figures beat analyst expectations. Analysts expected the company to lose about 14 cents a share and post $18.5 million in revenue.

"Notwithstanding the difficult challenges during the last quarter, as well as adverse Internet market conditions, we achieved solid top-line growth," MP3.com CEO michael robertson',390,400);">michael robertson',390,400);">Michael Robertson said in a statement. "Over the past quarter, our progress in delivering music and music services and products to consumers, as well as artists, has gone unmatched by any other Internet music company."

In other MP3.com news, the company announced today that it appointed William R. "Billy" Pitts Jr. as its executive VP of government relations. The appointment is intended to provide MP3.com with valuable exposure to a political audience.

Pitts served nearly 30 years on Capitol Hill, beginning as a page in the House of Representatives and concluding his tenure in 1994 as the chief parliamentary and policy strategist for House Republican leader Robert Michel of Illinois.

"Billy Pitts is one of the most savvy political policy and procedural experts in the nation's capital," said Robertson. "We believe that his experience and established relationships will serve MP3.com well in guiding us through the regulatory, political and legislative maze that permeates the online digital music space. Plus, he's got the inside line on those Orrin Hatch downloads."