Napster on the hunt for buyers
London, September 20 :
Napster has put itself up for sale and hired bankers to explore interest in the once notorious and now struggling music download service. The US group says it has asked investment bank UBS to weigh up “strategic alternatives’’ following market speculation of a tie-up or buyout.
Analysts have highlighted the service’s dwindling subscriber base and failure to turn a profit but chairman and chief executive Chris Gorog insisted the company could grow independently, while welcoming the opportunity to look for buyers. “Our goal is to enhance shareholder value which could potentially lead to a new strategic partnership or the sale of the company.’’ Shawn Fanning founded Napster in 2000 from the back room of his uncle’s garage as a teenage venture into the illicit field of music file sharing. At its height, more than 100 million users were gorging themselves on free music through a vast network of linked computers. It collapsed in 2002 under a welter of legal challenges, following a failed rescue attempt by German media group Bertelsmann.
Software company Roxio bought Napster and relaunched it as a legal site in 2003.
Its has just over 500,000 subscribers, and is thought to represent about a fifth of the market for legal music downloads. Its market capitalisation is $162m, not far above its cash position of $97m.
Some analysts said major online groups such as Amazon or Google might show interest in Napster.