US Electronics retailer Best Buy has said that it will be acquiring Napster, making it Best Buy’s first entree into the online-music sector. The deal will see Best Buy buying Napster shares at $2.65 apiece, with the acquisition being valued at $121 million.
Napster previously was a service that is synonymous with the industry, after being hated by almost everyone in the music industry – leading to its demise, but the rise of other alternatives like LimeWire, BitTorrent and Kazza. It has now reinvented itself to be a legit service, reaching 700,000 subscribers.
But the online-music industry is already crowded, from iTunes from Apple to Amazon MP3; and with the arrival of the revamped MySpace Music and a possible music strategy from Facebook.
The deal is expected to close in the fourth quarter, with all of Napster’s senior managing team signing deals that will keep them with the company after the acquisition.