Emusic to be Acquired
EMusic.com (www.emusic.com), a downloadable music subscription service, announced that it has entered into a non-binding letter of intent to be acquired by a major publicly-held media company. While not naming the media company at this time, Emusic stated it would set the acquisition price at $0.57 per share.
Founded in January 1998, Emusic has signed up 10,000 paying subscribers to its digital music service. The company has been active in the ongoing piracy battle with Napster, citing the difficulty of competing against a free service with its own legitimate service. Despite its growing list of subscribers, it expects to report a significant decrease in advertising revenue due to the depressed online advertising market.
This comes on the heels of major announcements on the part of all five major record labels. AOL Time Warner, Bertelsmann and EMI Group, are working with RealNetworks on a subscription service named MusicNet. And, Universal Music Group and Sony Music Entertainment's joint venture music service Duet, named Yahoo! as a major marketer and distributor.
The Washington Post reported that Universal Music Group would be using Emusic's digital distribution platform and subscription service for Duet, however, Universal was unavailable to confirm that report.
Emusic also indicated that is expected to receive a de-listing notice from Nasdaq and is planning on requesting a hearing to dispute this.