It’s been a bumpy ride for Napster, but the peer-to-peer company that changed the Internet and music industry years ago will soon be property of Best Buy. The retail giant says it will buy the ailing online music service for $121 million – or about twice the price at which the stock market had valued the company.
The move will enable Best Buy to offer DRM-free music downloads that would compete with services such as Amazon MP3 and the Apple iTunes store, all while making up for the steep drop in CD purchases in their stores over the last few years. On the other hand, this is a crucial development for Napster, which has struggled to stay relevant for the past few years. But it might be a bit late for the once-popular service given that competition is simply too fierce and too far ahead of them.
The transaction is expected to close during the fourth quarter of the year. Best Buy didn’t provide any specific details on their intentions for the deal nor their future relationship with Rhapsody, which currently powers the Best Buy music-download site. Information was also unavailable on whether Napster would continue to power the Circuit City-Napster download site.