Best Buy Buys Tunes for $121m

In an interesting move Best Buy has tendered an offer for Napster to the tune of $120m. Can kiosks in BB stores be far behind? Or maybe the Geek Squad will offer to remove DRM locks on that freshly loaded .99c song for $30? –

Best Buy, one of the largest retailers of CDs, and Napster, once the best known name in digital music, both offer digital subscription services, but neither have mounted much of a challenge to Apple, which holds more than 70 percent of the U.S. digital music market.

Napster and Best Buy are betting they have a better chance by combining rather than competing with each other.

Best Buy said on Monday it would pay $2.65 per Napster share, nearly double its closing price on Friday. Napster shares jumped 87 percent in early trading to $2.54.

In 2006, Best Buy teamed up in with RealNetworks Inc and SanDisk Corp to create a digital music subscription service and compatible media player.

The original Napster helped set the digital music market in motion in the late 1990s with a free music sharing service, which was shut down following a lawsuit filed by the music industry. The brand name was bought and resurrected as a legal digital subscription service, although it never really threatened iTunes.

Linky.