Inan effort to keep pace with other consumer electronic chains enteringinto the digital music market, Best Buy Inc. agreed to pay US $121million for online music retailer Napster Inc.
Aspart of the deal, Napster shares are being valued at $2.65 a share,nearly doubling its Friday closing price of $1.36. Best Buy said itwould be acquiring Napster’s 700,000 subscribers as well as thecompany’s Web-based and mobile retail capabilities.
Theoriginal Napster was a pioneer in the digital music market, offering afree music sharing service to its users. Following a lawsuit by themusic industry, the company was shut down by U.S. courts in 2002 overcopyright infringement issues. It was later reopened as a legitimateonline music distribution service in 2003.
The deal is set to close later this year.