Bertelsmann also is expected to fold the commercial version of the Napster file-sharing service, which it plans to launch this summer, into BeMusic. The acquisition of MyPlay will let BeMusic offer online music storage for its 12 million subscribers, giving them access to digital versions of CDs purchased through CDNow and BMG Direct.
Bertelsmann senior VP Frank Sarfeld says the acquisition compares favorably with Universal's purchase earlier this month of MP3.com for $372 million. "I think we did quite well," says Sarfeld of the MyPlay purchase price. Universal also acquired EMusic.com and its MP3 download subscription service in April.
Yankee Group analyst Kevin Noonan says the MyPlay deal is a bargain for Bertelsmann and that the service should integrate nicely into CDNow. Noonan says that integration is key if Bertelsmann is to turn MyPlay, which he says has yet to turn a profit, into a money-making business.