Bertelsmann out to buy Napster

Bertelsmann, also known as BMG has announced it’s planning to buy all shares of the once populair songsharing network Napster. The company already bought a large part of the company, but is now after all shares.

Bertelsmann out to buy Napster

Bertelsmann has already loaned Napster an estimated $80 million and has the option to acquire a large stake in the company. Buying Napster outright will reportedly cost Bertelsmann $15 million to $30 million.

Redwood City’s Napster has been shut down since July, following a federal court ruling that its service violated copyright laws. Prior to that, the file- sharing service had been wildly popular as a way to get music by top recording artists for free.

Napster is planning to resume as a subscription service. But it must first get permission to license recordings from the major music labels, whose complaints caused Napster to be shut down in the first place.

“It shows that Bertelsmann believes that there’s hope for salvaging Napster, ” said P.J. McNealy, an analyst for Gartner Inc. “Not only reconciling the lawsuits, but also getting compelling licenses.”

I just wonder, a company like KaZaA makes money with illegal downloads, why can’t a record industry not run software funded by advertising (And I don’t mean spyware) ?