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Napster Acquires Gigabeat

Napster (www.napster.com) announced today that it is acquiring Gigabeat ( www.gigabeat.com) to help in its ongoing music filtering efforts.

Gigabeat's technology creates personalized recommendations to customers based on their tastes and habits. Gigabeat states that its platform incorporates patent-pending collaborative filtering, music analysis, opt-in user profile and behavior tracking, editorial databases, and large-scale web data mining to recommend content. Gigabeat's song identification technology was likely of most interest to Napster in the short term, as users continue to modify file names to elude the filter.

While Napster continues to battle for its right to survive, last week several future competitors were announced. Real Networks announced its MusicNet service with licensed content from EMI Recorded Music, BMG Entertainment, and Warner Music Group. Meanwhile, Sony and Universal announced that Yahoo will be marketing their own subscription service called Duet. And Microsoft hopped into the ring with announced plans for Mongo Music, which it acquired last year.

The Gigabeat transaction was structured as an asset acquisition although financial details were not disclosed. The companies said that visitors to Gigabeat's Web site will be redirected to www.napster.com, although, as of today, this was not occurring.

This news comes as Napster was in court again today after the RIAA complained that the company was not effective in blocking out unauthorized, copyrighted songs. Napster states that it has blocked around 310,000 artist and song combinations from its service to date, as well as over 1,700,000 unique file names. Overall, the number of files shared per user has dropped by 50% in the past three weeks.

In an effort to win some favor from the court, Napster has also modified its user agreement so that it may deny access to anybody it determines is engaged in intentionally modifying file names.

Even if the court determines that Napster has effectively set up filters on its site, its legal troubles may not be over. The Associated Press reports that a group of music publishers and songwriters may petition the court today to allow several of the suits against Napster to be defined as class-action suits, which would make it easier for more plaintiffs to join.

Gigabeat's aquisition may be good news for start-up MoodLogic (www.moodlogic.com). MoodLogic today announced it has its own file recognition technology, which can identify an unlabeled music file in "less than ten milliseconds". According to the company, its service can be integrated into "jukebox players and digital music devices".

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