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Napster has hired investment bank UBS to review its options after receiving interest from potential buyers.

The once hugely popular music-downloading service said it was considering whether to sell up or form a joint venture, with potential suitors thought to include mobile operators or media companies such as Viacom.

"There's been interest by third parties to acquire the company," Chris Gorog, Napster's chief executive, told Reuters. "That activity has heated up as we've gotten traction with a lot of our new products."

A buyout or joint venture would see Napster being used to challenge the likes of Apple and eMusic, although that would require a huge marketing budget.

The site has been losing subscribers recently (it had a paying customer base of 512,000 at the end of June), although it is hoping to expand through its mobile service and its upcoming launch in Japan. It made a loss of US$9.8m in the three months to June 30th, down from US$19.9m a year earlier.

In a statement, Gorog said: "Napster is in a strong position to continue aggressively building our business as an independent company and we are pleased to also have the opportunity to thoughtfully examine potential combinations that may further enhance Napster's unique strategic and brand position in the centre of digital media.

Our goal is to enhance shareholder value which could potentially lead to a new strategic partnership or the sale of the company but in any event our primary focus will remain on growing Napster."

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Published 19 September, 2006 by Richard Maven

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Comments (1)

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Phillip Brown

I think its safe to say that Apple have built up so much momentum with iTunes and the branding of their mobile devices that the market is arguably monopolised although not literally.

over 3 years ago

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