Best Buy Wastes $121 Million on Napster Acquisition
By Anna Johnson on September 23rd, 2008Online consumer technology seller, Best Buy, has acquired online music service, Napster, for $121 million in cash. But according to TechCrunch, Best Buy just wasted its money.
While Napster has 700,000 subscribers and its financial performance has improved in the last year… it’s still a loss-maker. In the 2008 fiscal year ending March 31, 2008 Napster made a loss of $16.5 million on revenue of $127.5 million, compared with a loss of $36.8 million the year before.
Moreover, Napster faces tough, and arguably superior, competition in the form of iTunes, MySpace’s soon-to-be-launched free, ad-supported music streaming service, and Amazon’s DRM-free MP3 store.
Source: Don Reisinger, “Best Buy Puzzles With Napster Acquisition”, TechCrunch, September 15, 2008
