Best Buy Buys Napster For USD127 million, Preparing Global Surge Against Apple's iTunes

Best Buy has had a busy 2008. After having struck a GBP 1 billion deal with Carphone Warehouse earlier in May, it has now announced the purchase of controversial P2P pioneer Napster for USD 121 million, a 85 percent premium based on their last week's share price.

The giant high street consumer electronics retailer will stomp USD 54million upfront to acquire Napster's customer base of 700,000 as well as its web-based customer service solution and napster to go, its mobile technology assets.

The move could however be hampered by the fact that Best buy already has a partnership with Realnetworks which also has a music business - Rhapsody. Of course, Best buy is also a retailer for Apple's range of products, including the popular iPod which is tied to iTunes.

Napster, which was launched back in 2000, attracted the ire of the Music industry for being a free-for-all website distributing thousands of tracks and tried to change to a fully fledged legal music service albeit too late.

Napster, as a company, reported a USD 16.5 million loss for the current financial year and was acquired back in 2004 by German based company Roxio.

It will be interesting to see what strategy Best Buy will adopt in trying to make Napster a global brand.

The retailer has already signalled its intention of becoming an international force after its Carphonewarehouse deal opens the doors of European market.