Slacker personalizes Internet radio with iPod rival

NEW YORK (Reuters) - Fans of Internet radio who want to listen to their favorite stations away from the computer will soon be able to do so with a new digital music player called Slacker.

The new gadget, by a San Diego-based start-up of the same name, aims to compete with Apple Inc.'s iPod and in-car digital radios offered by XM Satellite Radio and Sirius Satellite Radio.

Slacker, which has the backing of three of the four biggest music companies and hundreds of independent labels, also launched its own Internet radio stations at www.slacker.com this week.

Fans can customize radio stations using their computer and listen to them on Slacker Portable Radio Players, which will retail from around $149 starting this summer. Stations are loaded via Wi-Fi wireless Internet connection.

The device will also be able to play MP3 and WMA audio files, and MPEG and Windows Media video formats, to compete in an increasingly crowded digital music player market that includes offerings by mobile phone makers.

"The hardware player is critical," Slacker Inc. Chief Executive Dennis Mudd said in an interview on Friday. "This is going to be the first personalized radio that's really portable," he said.

Personalized radio online allows users to customize music based on similar artists and genres, and has been made popular by other start-ups including Last.fm and Pandora, as well as Yahoo Inc.'s Launch.

The company also plans to offer in-car digital radios with the Slacker Satellite Car Kit.

"I expect that we'll be competing with several people but not directly because we're creating a new category," said Mudd.

Slacker said it has signed music licensing deals with Sony BMG Music Entertainment, Universal Music Group and hundreds of independent labels, and has around 2 million tracks at launch.

It said it also agreed terms, but not signed deals yet, with Warner Music Group.

Slacker's founders have a strong pedigree in the digital music industry. Mudd was previously chief executive of Musicmatch, an online music company which was sold to Yahoo in 2004. Slacker's president is Jim Cady, former chief executive at Rio, a digital media player maker. Jonathan Sasse, vice president of marketing, is the former chief executive of iriver America, another media device maker.

Mudd said Slacker is backed with $13.5 million in funding and employs around 50 full-time employees.