It looks like Napster's going to be sold once again, after the company issued a press release today saying that it's preparing for that possibility. Here's how "we're going to be bought" translates into Wall Street-ese:
"...in response to recent third party interest in establishing strategic partnerships or potentially acquiring the company, [Napster] has retained UBS Investment Bank to assist the Board and management in its evaluation of strategic alternatives."
Last month, I predicted that someone would buy Napster, and figured that Sandisk, with its increasing market share and strong line-up of devices, would be the one to do it. That scenario looks unlikely now that Sandisk and Rhapsody are working together, but I was close.
In its announcement, Napster pointed to $97 million in cash and annual revenues exceeding $100 million, and predicted a "strong up-tick in subscribers" from its current subscription pool of about a half a million people. The company's also hot on the mobile space, and hopes to make inroads in Japan with a launch there later this fall.
Napster settled with Vivendi Universal a couple of weeks ago for a shockingly low sum, making the company a more attractive acquisition target, but another big factor is how much cachet the Napster name still has at this point, when even its partial namesake Friendster is on the road to nowhere.
So... Anyone care to hazard a guess as to which company might be the third party interested in buying Napster?
(image from plasticandplush)
