CDNow Sets Plan to Cut Costs

CDnow fell short of analysts' estimates for its first quarter, losing $28.2 million, or 92 cents per share. An analyst polled by First Call/Thomson Financial had forecast a loss of 88 cents per share.
     The company announced a new operating plan to trim expenses by more than $12 million per quarter, reduce customer acquisition costs by half and drive up online advertising sales. Still reeling from its terminated merger with Columbia House, the company continues to seek a merger partner or investor and has retained Allen & Co. to field offers. In a conference call with analysts, the company said it expects to have a partnership or new financing in place by the end of the second quarter.
     In other first-quarter news, CDnow says revenue rose 99% from the same period last year, reaching $43.6 million. It added 440,000 new customers during the period.