Heard of Snocap? There's a good chance you haven't. And that's a big problem. In fact, according to a report in C/NET, Snocap has laid off about 60% of its workforce.

The company -- which got its start in 2002 -- was the brainstorm of twenty-something Shawn Fanning. His prior gig was Napster, which had a big disruptive impact on the music business.

But Snocap wanted to be different; that is, it wanted to develop a platform to allow file-sharing sites to sell music in accordance with the law. Basically, the company handles such complexities as licensing and e-commerce distribution.

In theory, it's a cool idea. But, in the real world, there hasn't been much interest. This is the case even though Snocap has a distribution deal with MySpace.

Essentially, I think the big problem is Apple Inc.'s (NASDAQ: APPL) iTunes. Simply put, it sucks up most of the attention in the online music space.

And now, according to a post in Valleywag, it looks like Snocap is prepping for a sale. But in light of the mixed performance so far, I wouldn't expect a premium deal.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.