Napster may be acquired - again

Posted by Wolfgang Gruener

The name of the P2P file sharing pioneer may be changing hands once again as the company today announced that it has received "third party interest in establishing strategic partnerships or potentially acquiring the company." The firm said it is consulting with UBS to assist the board and management in its evaluation of strategic alternatives.

Despite the firm's chairman and CEO is quoted saying "Napster is in a strong position to continue aggressively building our business as an independent company" today's announcement could be seen as a move to bringing the company into a more favorable position for a lucrative takeover. The company is currently valued at about $160 million and recently reported quarterly revenues of $28.1 million and a resulting net loss of $9.6 million. The music service currently has a paid subscriber base of about 512,000 users.

Napster's rocky journey began in 1999 when Shawn Fanning released the original file sharing software. In the same year, the Recording Industry Association of America (RIAA) launched a landmark lawsuit against the service, which forced Napster to shut down in July 2001. Bertelsmann Music Group (BMG) announced the acquisition of the company in May 2002, which, however, was denied by a bankruptcy judge in the following September.

Roxio acquired the brand during the liquidation auction of Napster. The company also purchased Pressplay as foundation of what it called "Napster 2.0." The new Napster relaunched in May 2003.

In August of 2004, Roxio sold its brand name and consumer software products division to Sonic Solutions for $80 million and renamed itself to "Napster, Inc." The renamed company began trading under the new symbol "NAPS" at NASDAQ in January of 2005.