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BMG

is looking to consolidate and own music distribution

on the internet. After snatching up CDnow and acquiring a stake

in Napster, BMG is now looking to purchase Emusic.com and Liquid

Audio.

The chairman of the

Ecommerce group, Andreas Schmidt, is holding preliminary talks

with both groups, and is looking to form an alliance with the

companies. BMG is looking to form these alliances because of competition

from Universal, who are trying to launch their own version of

digital music delivery. Liquid Audio had revenues of $3.4 million,

and a loss of $8.9 million for the third quarter.

Liquid Audio just

signed Zomba Records Group to distribute their music via the net.

Zomba has such artists as E-40, Mystikal and Too Short. Emusic,

which bought up custom CD music maker, CDuctive for $38 million

a few years back, could use the alliance or purchase. The site

has been struggling from lack of sales, and is almost out of capital

to continue operating.