After months of rumors, talks and denying from Napster‘s side, the online music service has hired UBS “in response to recent third party interest in establishing strategic partnerships or potentially acquiring the company”.
We speculated last month on the sale, after Loudeye was bought by Nokia. As I mentioned then, “if the idea, like the Loudeye-Nokia deal, is to merge the online and mobile music services into one seamless service, then Ericsson might be a good buyer…though I would expect the consumer side of things to be with JV company Sony Ericsson, rather than Ericcson. Also, hey, Sony needs a working music service, in case anyone noticed.”
Napster has a strong balance sheet with $97 million in cash,and is currently generating annual revenues in excess of $100 million, the company said. Details in the release here.
TheStreet.com: Gene Munster, analyst with Piper Jaffray, says that companies in three different areas are likely Napster shoppers. “The most logical is service providers, because music on phones is an emerging trend, and the service providers are trying to get up to speed quickly…Also in the pool of potential pursuers are online portal companies…The third, long-shot category could be broadband providers, Munster says, as companies “try and entice people to stick with their broadband service providers. I think you could see a music service integrated with those offerings.”
Related: Earnings: Napster Revs Up 34 Percent In Q2; Loss Narrows; Ties With DoCoMo; M&A Still On Plate