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September 16, 2008 Best Buy to Buy Napster for $121 Million By REUTERS
The Best Buy Company
<http://topics.nytimes.com/top/news/business/companies/best_buy_company/\
index.html?inline=nyt-org> said Monday that it planned to buy the
digital music service Napster
<http://topics.nytimes.com/top/news/business/companies/napster-inc/index\
.html?inline=nyt-org> for $121 million to compete with Apple
<http://topics.nytimes.com/top/news/business/companies/apple_computer_in\
c/index.html?inline=nyt-org> 's dominant iTunes service and its iPod
music players.

Best Buy, one of the largest sellers of CDs, and Napster, once the
best-known name in digital music, offer digital subscription services,
but neither has mounted much of a challenge to Apple, which holds more
than 70 percent of the digital music market in the United States.

Napster and Best Buy are betting they have a better chance by combining
rather than competing with each other.

Best Buy said Monday it would pay $2.65 a share for Napster, nearly
double its closing price on Friday. Shares of Napster, which is based in
Los Angeles, rose $1.17, or 86 percent, to $2.53.

The original Napster helped set the digital music market in motion in
the late 1990s with a free music sharing service, which was shut down
after a lawsuit brought by the music industry. The brand name was bought
and resurrected as a legal digital subscription service, although it
never threatened iTunes.

Best Buy, based in Richfield, Minn., plans to use Napster to reach new
customers over an array of devices. The proposed acquisition includes
Napster's 700,000 subscribers, its Web-based customer service and
mobile capabilities.

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