Liquid Audio to fold and distribute cash reserves to shareholders:

Under the decision announced Friday, shareholders will receive $2.50 per
share on Dec. 20. Payments will only be made to shareholders of record as of
Dec. 10.

The Redwood City, Calif.-based company will continue operations until the
board considers all options for its assets.

The distribution of assets ends a protracted battle over the future of the
online music technology company. It now appears that dissident shareholders
have succeeded in their push to liquidate the company, as opposed to selling
it to Alliance Entertainment.

....Liquid produces software that prevents digital song files from being
distributed illegally. Although the company was lauded by the recording
industry for its copy protection technology, it could not compete with free
file-swapping software such as Kazaa, Morpheus and the now-defunct Napster.
Liquid also was unable to offer enough songs for people to purchase due to
the recording industry's slower pace of releasing digitally encoded versions
of their copyrighted songs.

In September, Liquid sold its digital encoding patents to Microsoft for $7
million. [CNet]

When I was working with Billboard Online a few years back they had a deal with Liquid Audio. Maybe it's me, but I could never get it to work right, and you needed yet another player taking up space on your hard drive - too many negatives. Bye bye.