Digex Inc., the Web services unit of WorldCom Inc., trimmed its losses during its third quarter as it began looking for potential buyers and continued efforts to become financially independent of its beleaguered parent company.

The Beltsville-based firm, which manages and hosts Web-based applications for other businesses, said its losses were $37.7 million (58 cents per share) on revenue of $43.2 million during the quarter, down from $52.2 million (81 cents) on $52.3 million in revenue in the same period a year ago.

Digex has been financially dependent on WorldCom since the telecommunications giant acquired a controlling interest in Digex two years ago. During the quarter ended Sept 30, Digex drew $15 million in funds from WorldCom, up from $9 million in the previous quarter. The increased was necessary because WorldCom wasn't able to pay $3.6 million it owed Digex during the quarter for the services it sells its own customers. In total, WorldCom owes Digex $21.3 million in services it resold.

Digex reduced its workforce by 364 people during the quarter, to 818. That is down from 1,404 employees during the period last year.

The company's financial report came on the heels of Monday's announcement that it hired investment bank Lane, Berry & Co. and formed a committee of independent directors to consider the company's sale or other financial alternatives.

Digex "met key milestones toward financial independence," George L. Kerns, president and chief executive, said in a conference call with analysts. The company's earnings before interest, taxes, amortization and depreciation was positive for the first time, he said. The company also said it added 48 customers during the quarter.