Napster Terminates Executive Despite Company’s Progress

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The timing of the termination of Chief Operating Officer Laura Goldberg by Napster Inc. was surprising.


The L.A.-based Internet music company last week replaced her with Christopher Allen, who was most recently vice president of product strategy at Blockbuster Online and prior to that, served as vice president of product strategy at Yahoo Music.


Goldberg, who had been the face of the company as it transformed itself from a free music file-sharing site to a subscription service, wasn’t available. Napster declined to discuss the reasons for the 39-year-old Goldberg’s exit.


It recently posted positive cash flow in its first fiscal quarter of 2007-2008 and its $32.3 million in revenue is a 15 percent improvement over last year’s showing. A sharp reduction in sales and marketing expenses helped narrow losses to 10 cents per share, from a loss of 23 cents a year ago. The strategy of acquiring the subscribers from Time Warner’s AOL, which shut down its Music Now service earlier this year, seems to be working, too. The company has built a cash balance of $67 million and its stock is trading at roughly $3 a share.


Separately last week, Napster announced a marketing partnership with Hewlett Packard Inc. that would equip the company’s Pavilion and Compaq Presario desktop and notebook computers sold in the United Kingdom and Germany with access to Napster’s music subscription service.



‘Hero’ Lifts Activision

Sales for video game developer Activision Inc. soared 163 percent to $495 million first quarter, due mostly to the popularity of its “Guitar Hero 2.”


Wall Street reacted favorably as the company’s shares gained more than 4 percent with the announcement of first quarter numbers. The Santa Monica-based company reported net income of $28 million (9 cents per share) for the quarter, a huge comeback from a loss of $18 million (-7 cents) from the same period last year.


Analysts had expected the company to earn 7 cents a share on sales of $445 million, according to Thomson Financial.


Meanwhile, first quarter results of video game publisher THQ Inc. weren’t as inspiring, as the company’s net sales decreased nearly 25 percent to $105 million. Analysts had expected a better top line of $113 million. While the Agoura Hills-based company posted a net loss improvement of 23 percent from a year ago to $9.27 million, the market didn’t seem too pleased. Shares have dropped more than 5 percent since the company posted its first quarter reports.



Tryarc Acquired

Tryarc LLC, an information technology consulting firm, was acquired by Revere Group, a subsidiary of Nippon Telegraph & Telephone Corp., the world’s biggest phone company in terms of sales.


The acquisition makes sense for L.A.-based Tryarc because the company wants to expand its clientele among Japanese multinational companies based in the U.S., said Trevor Bezdek, founder of Tryarc. The company already has contracts with Sony and Toyota. Bezdek becomes the vice president of the Revere Group, also an IT consultancy in Chicago.


Tryarc was founded in 2001 and the company of 100 employees has had a strong media and entertainment focus, with clients such as the Screen Actors Guild and the Directors Guild of America.


Revere Group’s acquisition of Tryarc puts its L.A. operations on an aggressive growth trajectory, Bezdek said. Its presence in California is expected to triple to at least 300 employees within the next three years.


No financial terms of the deal were disclosed.



Passenger Powers Up

L.A.-based Think Passenger Inc., a firm that develops software-as-a-service tools that allows companies to add social networking features on their Web sites, received $8.3 million from Steamboat Ventures, a venture capital fund affiliated with Walt Disney Co. and StarVest Partners.


The money will be used to accelerate sales, improve product development efforts and open a New York office.


The latest injection of funds raises Passenger’s total funding to $12.5 million. The company, founded in 2005, leverages the social networking phenomenon to enable brands, such as ABC Studios, to create marketing opportunities, according to the company news release.



NASA Pact for CSC

Computer Sciences Corp. has inked a 10-year contract with NASA worth up to $597 million if all options are exercised.


El Segundo-based information technology giant will provide NASA’s supercomputers at its Ames Research Center in Moffett Field under the terms of the contract.


Computer Services may also support at the Center for Computational Services at Goddard Space Flight Center in Greenbelt, Md. as a part of the deal.


About a third of the $15 billion company’s annual revenue comes from government contracts.



Staff reporter Booyeon Lee can be reached at (323) 549-5225, ext. 230, or at

[email protected]

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