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March 28, 2006 at 6:31 PM

Dijji winding down?

Dijji, a public company trading on the over-the-counter bulletin board, said today that it was considering strategic alternatives, including a potential sale or shutdown of the business.

The Seattle company, formerly called Dwango Wireless, helps sell content for mobile phones based on well-known brands such as Rolling Stone magazine and Napster. The company made the statement in conjunction with a request it filed with the Securities & Exchange Communications asking for a 15-day extension for its annual report, which is due Friday.

The company said: “At this time, Dijji has not entered into any agreement in principle or any other agreement with potential acquirers or strategic partners.” In light of the uncertainty of operations, Dijji also said ” it will require additional time to determine the appropriate disclosure and analysis to be included in the annual report.”

In December, the company was required to change its name after it completed a trademark- and technology-separation agreement with Japan’s Dwango Co. in October.

The speculation is that the company has had a difficult time recovering lost revenues from ringtones, the margins of which have been dropping as “master tones” have grown popular. With master tones, more royalties go to recording labels, shrinking profits, said Mark Donovan, an analyst with M:Metrics, who discussed Dijji’s possible closure during a conference call today.

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