Snocap melting fast

Snocap, Shawn Fanning's post-Napster attempt to build a peer-to-peer service which kept the labels happy, seems to be running aground. Despite signing a deal to provide fulfillment services for MySpace paid downloads, the company is struggling with rumours that two thirds of the staff are being let go and a breakdown in relations with CD Baby.

Figures quoted by CNet suggest the problem facing Snocap:

Snocap said that its MyStores have attracted more than 175,000 registered consumers, and over 80,000 artists have created their own storefronts.

Two customers to every merchant? However was that going to work? Especially in an environment where MySpace has millions of users.