The Internet unit of media company Cox Enterprises Inc. said Wednesday that it will invest $45 million in MP3.com, giving a boost to the online music start-up's plans to be a major player in the future of digital music.
Cox Interactive Media Inc. also said it will form a joint venture with MP3.com, which features tens of thousands of songs that can be downloaded to a personal computer's hard drive. The companies would hold similar stakes in the venture, which would create and operate music-related Web sites. They would also share advertising and sales revenue.
The companies gave no further details, and executives of San Diego-based MP3.com, which plans to go public soon in a move expected to raise about $115 million, were unavailable for comment because of the mandated pre-listing quiet period.
However, a company spokesman said the investment would give Cox about a 10% stake. Other MP3.com backers include venture capital group Sequoia Capital and Pasadena-based Internet investment group Idealab, which invested $11 million in January.
Challenging the traditional music business, MP3.com lets artists post songs on its Web site (http://www.mp3.com) and takes a 50% cut of song sales, compared with the 85% to 90% taken by major record labels.