Best Buy To Acquire Napster
Author: Steve West
published: 2008-09-15 17:35:21
Napster, Inc., the online music sharing community that came about because Seth Green fell asleep and had nappy hair…or that’s the version I remember at least – is being purchased by Best Buy. Yes, Best Buy the store is acquiring Napster. The deal works out to be about $127 million, which is indeed a lot of money to us lowly folk. But for some reason that sounds like such a low number.
The $2.65 per share all-cash deal was announced earlier today, and is double the closing price for Napster on Friday. Wow, Napster is really not doing well. I guess that makes sense with iTunes and Amazon being such dominant forces and Napster having a significant stigma attached. Back in 2000 when Napster became incorporated it was the de rigueur choice of my fellow college buddies to download a myriad of music tracks. The RIAA began its tumultuous attack on the common man by first going after Napster, and then realizing that piracy is a much muddier problem when you’re talking about copyright and intellectual property laws.
"We believe Best Buy will be an ideal partner for Napster and are very excited by the benefits that this transaction delivers to our shareholders, partners and employees,” said Napster Chairman and Chief Executive Chris Gorog.
The real question is why is Best Buy interested in Napster of all things? Clearly the yellow tag company is interested in making a splash in the online digital distribution market. The problem is that Napster’s subscriber base is currently at 700,000, which is down from 830,000 back in April 2007. Napster is not the behemoth it once was, and just like those who wanted to bring it back as a legit service with brand recognition Best Buy will soon discover that we’ve all moved on past Napster.