Sets Sights on Internet Broadcaster

Rich media e-mail marketer said it is in talks for either an exclusive licensing agreement with or acquisition of online music broadcaster

Few details were disclosed about the talks between the two firms, aside from the fact that the companies were going through a due diligence period that should conclude in February. InChorus said it expects the deal to close fully sometime near the middle of the year.

Questions about inChorus have been lingering since December, when the company quietly cut what was left of its non-executive staff. In SEC filings, the company cited a “continued severe capital shortfall” as the reasons behind the layoffs, which left six at the company.

Those cuts continued a series of gradual layoffs of non-executive personnel that began in late October. The company posted a net loss of $1.2 million last quarter, on sales of $875,000.

Revenues aren’t the only worry for the startup. In April 1999, the SEC began an investigation into inChorus, previously known as Softlink, Inc., about a series of alleged shareholder violations. The SEC sought to determine whether inChorus made misleading statements regarding projected financial revenues, engaged in insider trading, or neglected to publicly register the sale of securities.

Now, it appears that inChorus is aiming to get back on track.

Privately owned is one of the largest Internet radio firms, running its own independent radio stations and also streaming the on-air content of local, offline radio stations. Overall, it claims more than 15,500 online radio stations. Its Internet Music Promotions unit, formed from a recent acquisition, seeks to promote unsigned artists and CyberRadio content.

Santa Clara, Calif.-based inChorus, which creates tools for marketers to embed animation and sound into e-mail messages, said it sees CyberRadio’s audience, artists and distribution network would create a “bold, new and more diverse future for and its shareholders,” chief executive William Yuan said in a statement Tuesday.

Yuan also said that Fountain Hills, Ariz.-based’s “provisional patents and copyrights on its business process and products” could complement and expand income from inChorus’ existing product sales and distribution.

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