Best Buy snaps up Napster

Jordan Golson — Mon, 15 Sep 2008 10:25:21 -0400

Big box consumer electronics retailer Best Buy has agreed to buy the original file sharing company, Napster, for $121 million. Napster, which is a number of years removed from its days as an illicit file sharing service, has 700,000 music subscribers and recorded a $4.38 million loss on $30 million in revenue in the most recent quarter.

It's unclear what Best Buy will do with the service other than take advantage of Napster's huge brand recognition as the first music sharing service and continue to run the company as a music subscription service. Best Buy President and COO Brian Dunn told the Wall Street Journal that the company will use Napster's assets to "reach new customers with an enhanced experience for exploring and selecting music and other digital entertainment products over an increasing array of devices."

The $121 million purchase price, $2.65 per share, is nearly double Napster's closing share price of $1.36.

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