FOCUS - America Online makes Internet music thrust
(recasts throughout, adds AOL exec interview, context,
competitors, closing stock price, byline, pvs DULLES)
By Eric Auchard
NEW YORK, June 1 (Reuters) - America Online Inc. <AOL.N>,
the world's top supplier of consumer Internet services, on
Tuesday said it will pay about $400 million in stock to buy two
key players in the booming Internet music field.
America Online said it agreed to buy Spinner Networks Inc.,
an Internet music broadcaster, and Nullsoft Inc., maker of
software that allows computer users to play music delivered via
the Internet and to broadcast audio programming over the Web.
The acquisitions expand AOL from being a distributor and
online chat forum for music-related programming of cable
television channels like Viacom's MTV or VH-1, Rolling Stone
magazine or CDnow, an online music retailer, into a fully
equipped music and audio programming network in its own right.
In addition, the deals position AOL to play a leading role
in the emerging field of Internet music delivery -- a method of
distribution that gives consumers direct access to music
recordings, bypassing the need for compact discs or tapes.
"The hallmarks of AOL's strategy are that we keep adding
features, we keep adding functions," President and Chief
Operating Officer Bob Pittman said. "Combining these leading
Internet music brands with the audience reach of our brands
will lift music online to the next level of popularity."
Pittman has decades of experience in the radio and music
fields, having pioneered MTV in the 1980s and served as a radio
station programmer in the 1970s who helped launch radio talk
show host Don Imus in New York City.
Spinner.com, San Francisco-based Spinner Networks's
Internet music service, broadcasts 2 million songs daily and
counts 1.5 million individual listeners monthly. The site can
be found at spinner.com. Recordings include more
than 175,000 songs in categories like country, Motown, Latin
Jazz and "Gumbo," supplied by some 350 record labels.
Nullsoft is the developer of Winamp, a leading brand of
software used to play "MP3" recordings, the main format for
music transmission over the Internet. It also offers SHOUTcast,
an MP3-based audio broadcast system that allows any Internet
user to, in effect, set up an online radio station. Nullsoft is
located on the Web at winamp.com.
Music delivered via the Web has acquired a big following
among college music listeners and begun to reach mainstream
audiences as record labels and computer industry heavyweights
have moved to embrace the new medium. As such, it promises to
transform the $14 billion U.S. recorded music industry.
In the Web broadcasting field, AOL faces rivals Yahoo! Inc.
<YHOO.O>, which has agreed to acquire Broadcast.com <BCST.O> in
a $5.7 billion deal, and Lycos Inc. <LCOS.O>, with its Lycos
Radio Network, as well as independent start-ups like MP3.com of
San Diego, which recently filed for a public stock offering.
Only two weeks ago, Yahoo announced plans for Yahoo! Radio,
a 10-channel radio network based on Spinner programming
technology. AOL plans to respect the terms of Spinner's
contract with Yahoo, a spokesman said.
Nullsoft, founded by Justin Frankel, a 20-year-old
University of Utah dropout, is in the process of relocating to
Spinner's San Francisco offices from its base in Sedona, Ariz.
Spinner.com, once known as TheDJ.com, was founded by Dave
Samuel to deliver music online using a music selection and
personalization technology developed by the company. Financial
backers included media investment bank Allen & Co, Sony Music
Entertainment <SNE.N> and Intel Corp. <INTC.O>, among others.
AOL said it will use the Spinner and Nullsoft technologies
and programming to allow consumers to play all leading Internet
music formats, including Liquid Audio, AT&T's Corp.'s <T.N> a2b
and the Secure Digital Music Initiative (SDMI), a r... |
