Napster terminates executive despite company's progress: company showed higher revenue, lower losses per share.

THE timing of the termination of Chief Operating Officer Laura Goldberg by Napster Inc. was surprising.

The L.A.-based Internet music company last week replaced her with Christopher Allen, who was most recently vice president of product strategy at Blockbuster Online and prior to that, served as vice president of product strategy at Yahoo Music.

Goldberg, who had been the face of the company as it transformed itself from a free music file-sharing site to a subscription service, wasn't available. Napster declined to discuss the reasons for the 39-year-old Goldberg's exit.

It recently posted positive cash flow in its first fiscal quarter of 2007-2008 and its $32.3 million in revenue is a 15 percent improvement over last year's showing. A sharp reduction in sales and marketing expenses helped narrow losses to 10 cents per share, from a loss of 23 cents a year ago. The strategy of acquiring the subscribers from Time Warner's AOL, which shut down its Music Now service earlier this year, seems to be working, too. The company has built a cash balance of $67 million and its stock is trading at roughly $3 a share.

Separately last week, Napster announced a marketing partnership with Hewlett Packard Inc. that would equip the company's Pavilion and Compaq Presario desktop and notebook computers sold in the United Kingdom and Germany with access to Napster's music subscription service.