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Best Buy Snaps Up Napster For 121 Million

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by Laura Rich
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Sep 15 2008 11:34am EDT

Best Buy Snaps Up Napster for $121 Million

Sam Gustin notes: Just under a decade ago, Napster was a rebel file-sharing service operating out of a college dorm room. Soon, it will be a digital appendage of a big box retailer.

This morning, Best Buy announced that it is buying Napster for $121 million, or $54 million net of Napster's cash and investments. At $2.65 per share, that's almost double what Napster's stock closed at on Friday.

"This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers," said Brian Dunn, president of Best Buy, said in a statement.

Napster's 140 Los Angeles-based employees will not face "significant" changes the company said. The deal will close in the fourth quarter of this year.

For Best Buy, this is a good move, if for no other reason than it gets a recognized digital music brand for what amounts to loose change compared to its $40 billion in annual revenue. □

Laura Rich is a co-founder of Recessionwire, which provides news, advice, perspective and humor about the recession and the recovery.
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