Warner Music Group’s $33 Million Investment In Imeem and Lala Written Off
Warner Music Group filed a financial report last week and it stated that they wrote-off $33 million in equity and debt from Imeem and Lala. Imeem is a music social network and Lala is a streaming website. Below is an excerpt from the report:
During the quarter ended March 31, 2009, the Company determined that its cost-method investments in digital venture capital companies were impaired largely due to the current economic environment and changing business conditions from the time of the initial investment. In accordance with FAS 157, the Company used Level 3 inputs to determine the fair value of these investments, which include management’s estimates of assumptions that market participants would use in pricing these assets. As a result, the Company recorded charges of $29 million, including $16 million to write-off its investment in imeem, inc. (“imeem”) and $11 million to write-down its investment in lala media, inc (“lala”) to its estimated fair value.
Imeem recently raised additional funding and is putting together an iPhone application. Imeem’s valuation was north of $200 million at one point but has fallen since. Warner invested $20 million in Lala and $15 million in Imeem.
[via VentureBeat]This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry