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Microsoft pact pushes firm into spotlight

(ran SS edition of METRO & STATE)

The firepower behind Liquid Audio Inc. got stronger this week as Microsoft Corp. signed on as a partner in developing technology standards to download music from the Internet.

As part of Tuesday's accord, Redwood City, Calif.-based Liquid Audio will adopt Microsoft's NetShow server as its strategic platform for streaming media and will work with the Seattle software giant to market the technology and push for it to become the industry standard for listening to and purchasing music from the Web.

The companies also will integrate Liquid Audio's Liquid Music Player with Microsoft's Web site, and plans call for Liquid Audio to select Microsoft Internet Explorer as its Web browser of choice.

For Liquid Audio, a start-up software concern, the pact marks another chapter in a busy year. In the past two months alone, the year-old company has penned deals with Capitol Records Inc. and BMG Entertainment to offer downloaded music via the Internet.

It appears to be just the beginning for Liquid Audio, one of a handful of companies attempting to build a benchmark system. Earlier this week, AT&T Corp. launched a trial version of its A2B program, which enables Internet users to listen to a full-length song by the BMG musical group Verve Pipe, then offers the group's current album for sale directly from the Internet.

The concept of downloading music from the Internet has grabbed the attention of many in the music business as the industry searches for ways to drum up waning consumer interest. Proponents say that Web surfers can sample groups they might otherwise miss, and that the Web provides new ways to peddle better-known acts.

Scott Burnett, vice president of marketing at Liquid Audio, said that its Microsoft partnership gives his company a huge boost in attempting to build the Web as a preview and distribution tool.

"This is a long-term play," he said.

Burnett envisions his company at the forefront of a trend in which the Internet serves parallel to traditional distribution channels, particularly retail. He also sees Internet marketing opportunity beyond simply downloading songs.

Yet, as the practice of downloading songs from the Internet grows, some _ especially retailers _ howl that the expansion will come at the expense of stores.

But BMG senior vice president Kevin Conroy sees retailers and Internet companies as partners rather than adversaries. "Online can support offline sales," he said, adding that most consumers still prefer store shopping.

Even Burnett stressed that the need for stores will never die.

"People will still want to enjoy the tactile experience (of going to a store)," he said, noting that Liquid Audio's service complements, and does not supplant, retailers' role.