Napster CEO calls it quits

The chief executive officer of embattled file-sharing company Napster has resigned, the company confirmed in a statement Tuesday.

Konrad Hilbers, who sat at the helm of Napster for nearly a year, stepped down as ongoing efforts to pull the company out of its financial woes have been unsuccessful.

Napster continues to battle a devastating lawsuit filed against it by the Recording Industry Association of America Inc., representing the major recording companies, that shut down Napster's service last year. It has also had a rough time making deals with those labels to offer their music online. As a result, the Redwood City, California, company has indefinitely shelved its plans to launch a file-sharing service that complies with digital copyright laws.

Efforts to raise money from investors also have gone unsuccessful, the company said Tuesday in a statement. German media giant Bertelsmann AG, which has already poured upwards of US$100 million into the company, made an unsuccessful bid last month to acquire the whole of Napster. That deal was shot down by some members of Napster's board, according to media reports on Tuesday.

"We deeply regret that we have not yet been able to find a funding solution that would allow Napster to launch a service to benefit artists and consumers alike," the company said in its statement.

Lacking a cash infusion or a service to sell to customers, Napster last month was forced to trim 30 percent of its staff.

Further efforts to cut costs are slated to take place, Napster said Tuesday. The Wall Street Journal, citing unnamed sources, reported Tuesday that Napster may be facing bankruptcy.

"We will be looking at additional steps in the coming week to further reduce expenses," the company said in its statement.

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