Napster's (NAPS) fourth-quarter operating loss widened but the online music company said it expected first-quarter revenue above analysts' expectations and suggested that Yahoo!'s (YHOO) entry into the sector may not be such a bad thing.

Napster said after the bell Wednesday that its loss from continuing operations was $24.3 million, or 59 cents a share, compared with a year-ago loss of $6.57 million, or 37 cents a share.

Revenue, however, nearly tripled to $17.4 million from $6.06 million a year earlier.

The top- and bottom-line results beat the expectations of analysts, who, according to Thomson First Call, were anticipating a loss of 63 cents a share on revenue of $16.2 million.

The company also said it ended its fiscal year with 412,000 subscribers.

For its first quarter, Napster expects revenue to increase to $19 million to $21 million, which reflects more modest growth due to the start of typical summer seasonality for both Internet usage and music sales and the university summer recess, which causes a seasonal cancellation of most university subscriber accounts.

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Analysts were expecting first-quarter revenue of $17.8 million.

Despite mostly upbeat news, after-hours traders were as unwilling to take Napster shares higher as regular-session investors were intent to sell them off after news late Tuesday that Yahoo! would be

entering the online-music market.

In late trading, Napster was off 3 cents to $4.62 after plummeting nearly 27% in regular trading.

However, Napster suggested in its press release that its cost structure was well-positioned to survive the entry of an online titan that is aiming at undercutting Napster in price. "We believe that the promotion of new subscription services by competitors will expand the market," said Chairman and CEO Chris Gorog.

"Based on our discussions with record labels, it is clear that very aggressive introductory pricing for portable subscriptions from competitors will be at negative gross margins and we believe that consumers should expect rapid price increases," Gorog noted.

"We further believe that most consumers will demand that a paid subscription service should be an ad-free environment and Napster is committed to offering true music fans a safe haven. Napster has, and continues to outsell many significant competitors both in downloads and subscription because of the quality of our experience and the power of the Napster brand."