Shawn Fanning???s follow-up to Napster seems to be in trouble.

Snocap, a company he co-founded in 2002, has cut its workforce from 57 to 26
and put itself up for sale.

???We think it???s probably best for us to be part of a larger
entity,??? Rusty Rueff, chief executive, told CNET.

The San Francisco company handles digital rights management
for online music stores and artists??? sites. It enabled a legal version of the
file-sharing peer-to-peer technologies that Napster under Fanning exploited. It says laying off staff will make it more
attractive to potential buyers.

Snocap does not appear to have gained much traction as
online music stores and P2P as a method of distribution have struggled ??? one of
its customers ??? Mashboxx.com ??? even failed to launch.

Fanning is only listed as a member of the board at Snocap. For the past 18 months, he has been working on his third start-up, Rupture, a service adding social networking to online gaming.