November 14, 2003

CNET acquires MP3.com, plans new music service

Author: Chris Preimesberger

Mp3.com, Inc. told its subscribers today that CNET Networks, Inc. has acquired the assets of the company, and that on Tuesday, Dec. 2, at noon PST, the MP3.com Web site will no longer be accessible in its current form.

MP3.com is owned by Vivendi Universal Inc., which also owns EMusic, GetMusic, MP4.com, Rolling Stone.com, and TrueSonic.

In an announcement to its customers and newsletter list, MP3.com said the following:

"CNET Networks, Inc. plans to introduce a new MP3 music service in the near future. If you would like to receive email updates on this service, including an invitation to a special members-only preview, please sign up here.

"MP3.com is not transferring your personal information to CNET Networks, Inc. or any other third party.

"On behalf of all of us at MP3.com we thank you for your patronage and continued support. It has been a privilege to host one of the largest and most diverse collections of music in the world. MP3.com wishes to express its sincere thanks to each of you for making us your premier destination for music online.

Sincerely,
MP3.com"

CNET spokeswoman Martha Papalia told NewsForge, "CNET Networks, Inc. has signed a definitive agreement with VUNet USA to aquire the assets of MP3.com, Inc. The deal is scheduled to close in December. We are not at this time disclosing transaction terms.

"With this move, we are further enhancing our position as a premier global
provider of interactive content. In 2004, we plan to enter the online music
market, which has a very attractive demographic that is similar to our GameSpot
Web site, the most highly trafficked gaming content site. We plan to launch a
Web site that will be 'the place you go to know' about music."

MP3.com is one of the pioneer pay-for-music download sites on the Internet. In addition to marketing digital music, the San Diego-based company also sells jukebox, CD, and DVD-burning software and hardware, such as a portable device manager and portable MP3 players.

However, with the emergence of freely distributed P2P software such as Napster, Kazaa, Grokster, and Morpheus to share music and other files, MP3.com and other independent sites have suffered in the marketplace. The recent addition of Apple's iTunes to the legitimate music marketing space was another blow to MP3.com.

MP3.com is known within the Linux community for having one of the largest Linux server clusters among Internet e-business companies, utilizing more than 750 boxes in the main cluster.

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