The merger has been called off between Edmonds-based NetMusic Entertainment and Audio Lunchbox of Los Angeles. Unwinding the deal is in the best interest of all parties, the companies said.

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The merger has been called off between Edmonds-based NetMusic Entertainment and Audio Lunchbox of Los Angeles. Unwinding the deal is in the best interest of all parties, the companies said.

NetMusic announced last December it would acquire Audio Lunchbox, and said at the time it would launch a rebranded consumer interface in January of this year.

NetMusic said the latest move reflects its intent to focus on wholesale and development businesses instead of retail opportunities.

NetMusic sells digital music downloads, video-on-demand and online video rentals, and Audio Lunchbox offers a collection of independent music for download.


Telstra won’t test

TV Internet software

Telstra, Australia’s largest telephone company, has decided not to do a field trial of Microsoft software that allows television services to be offered over a high-speed Internet connection.

“Telstra has discussed the prospect of doing a field trial with Microsoft, but we have decided not to do so at this time entirely for our own internal and local market reasons,” Telstra spokesman Michael Grealy said yesterday in an e-mailed statement.

Microsoft this month said software and hardware supporting its so-called Internet Protocol for TV service was running three months behind schedule. Telephone companies around the world, such as SBC Communications, are investigating Internet TV to compete with cable-television companies.

Telstra will consider Microsoft’s platform if and when it decides to offer an Internet TV service, Grealy said.

Nation / World


TD Waterhouse

acquisition planned

Rejecting a takeover offer from E-Trade Financial, Ameritrade says it will instead acquire rival online brokerage TD Waterhouse from Toronto-Dominion Bank.

The companies valued the all-stock deal at about $2.9 billion.

Ameritrade Chief Executive Joe Moglia will become CEO of the new TD Ameritrade, which the Omaha, Neb.-based company said would become the largest online broker at 239,000 average daily client trades. The combined company would have annual revenue of more than $1.8 billion and about 5.9 million total accounts.

E-Trade earlier this month reportedly sweetened its bid to acquire Ameritrade, offering a 49.5 percent stake in the combined company and about $2 billion in cash.

Compiled from Seattle Times staff, Bloomberg News and The Associated Press


Research in Motion

2 more claims tossed

in BlackBerry battle

NEW YORK — The U.S. Patent and Trademark Office has issued two more preliminary rejections of patent claims brought against Research in Motion regarding its popular BlackBerry mobile e-mail device.

The patent office has now challenged four of the five patents that RIM was ruled to have violated by a federal court. The patent-office decisions were issued Tuesday, the agency said yesterday. A decision on the fifth patent in question is still pending.

RIM and NTP agreed to a $450 million settlement of the dispute in March, but a recent dispute over the terms now threatens to kill the deal.

Morgan Stanley


profit falls steeply

Profit at embattled Wall Street brokerage Morgan Stanley fell 24 percent in the second quarter due to difficult market conditions and higher legal expenses in connection with high-profile lawsuits, the company said yesterday.

Morgan Stanley also said it is still reviewing a potential spinoff of its Discover Financial Services credit-card division — a low-margin business that nonetheless provides Morgan Stanley with strong cash flow.

Shares of Morgan Stanley fell 45 cents to close at $50.52 in trading late yesterday on the New York Stock Exchange.

David Sidwell, Morgan Stanley’s chief financial officer, said the pending departure of Chairman and Chief Executive Phil Purcell, who submitted his resignation last week under pressure from disgruntled shareholders and former executives, has not affected the company’s financial status, though he added that it has made recruitment and retention more difficult.


Scrushy jury starts

fresh with alternate

A judge scuttled a month of unproductive deliberations in the fraud trial of fired HealthSouth CEO Richard Scrushy yesterday as she dismissed a sick juror and ordered the panel to begin work anew with an alternate.

Citing a juror’s “recurring health problems” that have gotten worse as days of deliberations turned into weeks, U.S. District Judge Karon Bowdre replaced one male juror with another and told the jury to “start from scratch” with their talks.

The reconstituted jury agreed with Bowdre’s request to extend their workday in hopes of reaching a verdict in a trial that began in January.

Outside court, Scrushy said he still expects to be exonerated and urged patience with the jury, which has been criticized in the local media for its failure to reach a unanimous decision in 17 days of deliberations spread out over a month.

Compiled from The Associated Press