Best Buy to Acquire Napster for $121 Million

http://www.centernetworks.com/best-buy-acquisition-napster

by moses1400 • 18 years ago

21 24 18 years ago

babooo404• 18 years ago

does anyone actually use napster anymore?

zacharye2• 18 years ago

"From the release, the proposed acquisition includes Napster’s approximately 700,000 digital entertainment subscribers..."

halo• 18 years ago

$173 per subscriber seems a little high to me.

chez17• 18 years 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• 18 years 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.

fallentimes8• 18 years 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.

zhyder3• 18 years ago

Almost all acquisitions fail? Could you elaborate why you believe that? Will you not consider acquisition as an exit strategy?

fallentimes8• 18 years 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.

fallentimes8• 18 years ago

With regards to your second question:

I've read varying numbers, but all the empirical academic studies I've encountered agree: the majority of mergers & acquisitions fail. (Side note: if anyone has empirical counterexamples, I'd love to read them. Please post here or email me). Also, before TicketStumbler I used to work at a financial transaction services firm involved with senior lenders, M&A and private equity.

The only ones that succeed at a rate above 50%, by their measure, are ones where the Companies involved are very closely related. The measurements for success are tricky, which is why it's important to read the criteria used within the study.

Most retail bank acquisitions are successful. Additionally, Johnson & Johnson has a robust track record of successful acquisitions. Google does not.

Here are some qualitative and quantitative articles on the subject (I wasn't able to dig up my favorite academic study on it; I'll keep looking though). Additionally, if you have access to LexusNexus or something similar, there's a myriad information and studies on the topic. In short, acquisitions are more often than not a fool's game that many people & companies have strong incentives to carry out.

http://is.gd/2Fla (PDF from Wharton)

http://www.theseus.fr/03370970/1/fiche___pagelibre/

http://findarticles.com/p/articles/mi_m3257/is_n1_v43/ai_696...

http://news.cnet.com/8301-10784_3-9796296-7.html

All else equal, the usual winners of an acquisition are: the fee trolls, lawyers, the shareholders and upper management of the company being acquired (unless it's hostile or due to negative circumstances, but even then..) and the upper management team of the acquiring company.

Generally speaking the losing parties are: the acquiring company's shareholders, and employees at both companies.

josefresco• 18 years ago

Why is MarketWatch.com saying the price was $54 million?

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• 18 years 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• 18 years ago

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

Best Buy to Acquire Napster for $121 Million

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