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Liquid Audio Sold To Geneva Media For $3.2 Million

Liquid Audio, Inc. has sold its digital music fulfillment business to Geneva Media, LLC, an affiliate of Anderson Merchandisers, LP, one of the nation's leading media distributors, for $3,200,000. Liquid Audio has also transferred ownership of "Liquid Audio" related trademarks to Geneva.
The privately held Geneva Media will purchase assets that include Liquid Audio's distribution technology and infrastructure. The transaction is expected to be completed by January 24, 2003.

Anderson's agreement with Liquid Audio includes the transfer of essential employees located at the company's research and development headquarters in Redwood City. In addition, Liquid Audio's co-founder, Gerry Kearby, will head Anderson's new digital media division.

"This is a significant moment in the history of the music business. The fact that one of the largest distributors of physical product has recognized the unlimited potential of the electronic sale of music clearly demonstrates that this will be a huge part of our industry's future," said Doug Morris, chairman and CEO of Universal Music Group. "Anderson's announcement is similar to the first flicker of an electric light bulb — the music business has always been a packaged goods business and now it will be complimented by electronic distribution. This is the beginning of a revolution and Universal is excited to be a part of it."

"This acquisition provides the perfect promotion vehicle for our physical distribution business," said Charlie Anderson, CEO of Anderson Merchandisers. "In addition, it will strategically position retailers to participate in the industry's legitimate downloading future."

Liquid Audio, Inc. was formed in 1996 and provided record labels, artists and retail websites the software, infrastructure and services for the secure digital delivery of media over the Internet. Today, the company is pursuing a dissolution while exploring dispositions of its remaining assets.