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Loudeye Tunes in to Radio

After spending years as a plain encoding company, Loudeye (www.loudeye.com) has been making dramatic moves into the Internet radio space, so far acquiring three companies in just a few months.

In March, Loudeye acquired technology assets from OnAir, a provider of Internet radio solutions. Next, Loudeye purchased Addition Systems for its ad insertion capabilities. And on Tuesday, it acquired technology from theDial, which will provide content programming capabilities. Financial terms of the deal were not disclosed.

Loudeye said it would integrate theDial’s programming capabilities, production facilities, and on-air personalities into its online radio infrastructure product line called Loudeye Radio. The company said theDial streamed more than 30 million minutes of content last month.

Joel McConaughy, Loudeye's chief technology officer said that assets from theDial are a "key asset" to the company's radio strategy. He said that the company was looking to be a turnkey outsource provider of affiliate radios stations. "So if you're an e-tailer or a portal, we are a one stop solution to add radio on their [site] including advertising, branding, cross promotion and merchandising," said McConaughy.

Loudeye said it would employ about 10 people from theDial, including sales, technology and on-air talent. The company known as theDial will likely cease to exist, said McConaughy.

But Loudeye is getting in when other companies are failing. Witness the troubles of Net radio companies like WebRadio.com, Live365, eYada, BroadcastAmerica, Global Media and others that are cutting back or going out of business.

McConaughy seems confident about Loudeye's direction, however. "We think it's one of timing. I don't think there's much question that the ad supported model will become the viable business model," he said, drawing comparisons to the traditional radio market. "We want to make sure we position products so as the market comes back, we can take advantage of it," said McConaughy.

Still, Loudeye isn't part of the major music initiatives with the five labels, PressPlay or MusicNet. It has made a deal with Napster, however, but that's only in regards to Loudeye's music recognition technology. McConaughy said that Loudeye is looking to expand beyond the Internet radio market and is looking to the subscription and download markets as well.

"My dad told me to buy low and sell high," said McConaughy. "It's really a good time to be acquiring assets."

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