5 ms·

Best Buy to Acquire Napster for $121 Million

21 points by moses1400 18y ago

babooo404 18y ago
does anyone actually use napster anymore?
- zacharye 18y ago
  "From the release, the proposed acquisition includes Napster’s approximately 700,000 digital entertainment subscribers..."
  - halo 18y ago
    $173 per subscriber seems a little high to me.
    - zacharye 18y ago
      Agreed, though I'm sure Best Buy will be able to market the product much better than it is currently - and to hoards of people who probably use iTunes and don't know of any unlimited subscription options unless they happen to have caught a Rhapsody commercial and had their interest piqued.
    - fallentimes 18y ago
      I think there needs to be another "Halo Law" for non-profitable internet acquisitions.
    - zhyder 18y ago
      Really? They're paying a little more than 1x the revenue per subscriber, which sounds like a great deal. It's not an ad-supported web2.0 company.
      - liuliu 18y ago
        agree. It is not an ad-supported company which make its subscriber more valuable because they actually paid.
- chez17 18y ago
  I do. It really is a great service. For $13 a month you get pretty much all the music you want streaming to your computer. For someone who is at a computer all day, its great. Also, as someone who goes from obsession to obsession, it really does fit the bill. The one drawback is that artists can mark their tracks as "Buy Only" and while it was rare to come across this at first, it seems more and more artists (probably the labels actually) have been restricting their music. With Best Buy coming into the picture, I can only see profit becoming a bigger factor. I imagine I will cancel my subscription sooner rather than later. How do you do business with a company that tries to sell you an HDMI cable for $80 with a straight face?
maxklein 18y ago
This just goes to show - if you build a strong brand name for a period of time, the amount of money you can milk from that name is really really large. Look at netscape. It has changed, but people know and recognize the brand, and they keep going back.
fallentimes 18y ago
Another acquisition that is most likely going to fail. They usually do. I love reading the empirical academic studies on them. Edit: Changed "going" to "most likely going". I'm not an oracle although it would be fun.
- zhyder 18y ago
  Almost all acquisitions fail? Could you elaborate why you believe that? Will you not consider acquisition as an exit strategy?
  - fallentimes 18y ago
    With regards to your first question: We plan on issuing dividends - that's it. We will not be acquired unless 1) We have a family and/or close friend emergency that requires ridiculous amounts of money crucial to someone's survival or well being; 2) Tom or I become sick of what we're working on and want to work on something else or 3) We're not making enough money to live off of. We're already profitable so I'm not too concerned with #3 yet. Anything I've ever wanted I already have - more money is not going to make me any happier. Also, I worry that I don't have whatever is it takes to have gobs of money and not change as a person.
    - zhyder 18y ago
      That's an interesting point of view. Apart from financial gains for founders, acquisition also makes sense for the consumers in many cases. E.g. it makes sense for the company building a spreadsheet app to get together with the ones building the presentation and word processing apps. The alternative is for every company to build everything (or at least everything in each app suite), and that's just wasteful. That's just the product development side. There's also marketing, manufacturing (not in web apps), and distribution (also not in web apps) synergies. I'm curious to understand your logic against acquisitions. Integrating 2 corporate cultures, creation of larger bureaucracies?
      - fallentimes 18y ago
josefresco 18y ago
Why is MarketWatch.com saying the price was $54 million? http://www.marketwatch.com/news/story/best-buy-acquire-napster-54/story.aspx?guid= http://www.marketwatch.com/news/story/best-buy-acquire-napst...{08814974-C2C6-4134-BAE6-AC9651B16AB8}&dist=msr_2 ^ holy mangled URL, so much for pasting that here.
Kilimanjaro 18y ago
Napster is so worthless right now that it is better to spend $1M (and save $120M) in a couple of seasoned developers and start from scratch with some new and fresh ideas.
dmix 18y ago
Ha Napster doesn't support OSX yet? I knew what I was getting into when I went to the site but... wow.

21 points by moses1400 18y ago

babooo404 18y ago

does anyone actually use napster anymore?

zacharye 18y ago
"From the release, the proposed acquisition includes Napster’s approximately 700,000 digital entertainment subscribers..."
- halo 18y ago
  $173 per subscriber seems a little high to me.
  - zacharye 18y ago
    Agreed, though I'm sure Best Buy will be able to market the product much better than it is currently - and to hoards of people who probably use iTunes and don't know of any unlimited subscription options unless they happen to have caught a Rhapsody commercial and had their interest piqued.
  - fallentimes 18y ago
    I think there needs to be another "Halo Law" for non-profitable internet acquisitions.
  - zhyder 18y ago
    Really? They're paying a little more than 1x the revenue per subscriber, which sounds like a great deal. It's not an ad-supported web2.0 company.
    - liuliu 18y ago
      agree. It is not an ad-supported company which make its subscriber more valuable because they actually paid.
chez17 18y ago
I do. It really is a great service. For $13 a month you get pretty much all the music you want streaming to your computer. For someone who is at a computer all day, its great. Also, as someone who goes from obsession to obsession, it really does fit the bill. The one drawback is that artists can mark their tracks as "Buy Only" and while it was rare to come across this at first, it seems more and more artists (probably the labels actually) have been restricting their music. With Best Buy coming into the picture, I can only see profit becoming a bigger factor. I imagine I will cancel my subscription sooner rather than later. How do you do business with a company that tries to sell you an HDMI cable for $80 with a straight face?

maxklein 18y ago

This just goes to show - if you build a strong brand name for a period of time, the amount of money you can milk from that name is really really large. Look at netscape. It has changed, but people know and recognize the brand, and they keep going back.

fallentimes 18y ago

Another acquisition that is most likely going to fail. They usually do. I love reading the empirical academic studies on them. Edit: Changed "going" to "most likely going". I'm not an oracle although it would be fun.

zhyder 18y ago
Almost all acquisitions fail? Could you elaborate why you believe that? Will you not consider acquisition as an exit strategy?
- fallentimes 18y ago
  With regards to your first question: We plan on issuing dividends - that's it. We will not be acquired unless 1) We have a family and/or close friend emergency that requires ridiculous amounts of money crucial to someone's survival or well being; 2) Tom or I become sick of what we're working on and want to work on something else or 3) We're not making enough money to live off of. We're already profitable so I'm not too concerned with #3 yet. Anything I've ever wanted I already have - more money is not going to make me any happier. Also, I worry that I don't have whatever is it takes to have gobs of money and not change as a person.
  - zhyder 18y ago
    That's an interesting point of view. Apart from financial gains for founders, acquisition also makes sense for the consumers in many cases. E.g. it makes sense for the company building a spreadsheet app to get together with the ones building the presentation and word processing apps. The alternative is for every company to build everything (or at least everything in each app suite), and that's just wasteful. That's just the product development side. There's also marketing, manufacturing (not in web apps), and distribution (also not in web apps) synergies. I'm curious to understand your logic against acquisitions. Integrating 2 corporate cultures, creation of larger bureaucracies?
    - fallentimes 18y ago

josefresco 18y ago

Why is MarketWatch.com saying the price was $54 million? http://www.marketwatch.com/news/story/best-buy-acquire-napster-54/story.aspx?guid= http://www.marketwatch.com/news/story/best-buy-acquire-napst...{08814974-C2C6-4134-BAE6-AC9651B16AB8}&dist=msr_2 ^ holy mangled URL, so much for pasting that here.

Kilimanjaro 18y ago

Napster is so worthless right now that it is better to spend $1M (and save $120M) in a couple of seasoned developers and start from scratch with some new and fresh ideas.

dmix 18y ago

Ha Napster doesn't support OSX yet? I knew what I was getting into when I went to the site but... wow.