

Best Buy to Acquire Napster for $121 Million - moses1400
http://www.centernetworks.com/best-buy-acquisition-napster

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fallentimes
Another acquisition that is most likely going to fail. They usually do. I love
reading the empirical academic studies on them.

Edit: Changed "going" to "most likely going". I'm not an oracle although it
would be fun.

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zhyder
Almost all acquisitions fail? Could you elaborate why you believe that? Will
you not consider acquisition as an exit strategy?

~~~
fallentimes
With regards to your first question:

We plan on issuing dividends - that's it. We will not be acquired unless 1) We
have a family and/or close friend emergency that requires ridiculous amounts
of money crucial to someone's survival or well being; 2) Tom or I become sick
of what we're working on and want to work on something else or 3) We're not
making enough money to live off of.

We're already profitable so I'm not too concerned with #3 yet. Anything I've
ever wanted I already have - more money is not going to make me any happier.
Also, I worry that I don't have whatever is it takes to have gobs of money and
_not change as a person_.

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zhyder
That's an interesting point of view. Apart from financial gains for founders,
acquisition also makes sense for the consumers in many cases. E.g. it makes
sense for the company building a spreadsheet app to get together with the ones
building the presentation and word processing apps. The alternative is for
every company to build everything (or at least everything in each app suite),
and that's just wasteful.

That's just the product development side. There's also marketing,
manufacturing (not in web apps), and distribution (also not in web apps)
synergies.

I'm curious to understand your logic against acquisitions. Integrating 2
corporate cultures, creation of larger bureaucracies?

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fallentimes
Sure.

The elimination or reduction of true work schedule flexibility (which we don't
have entirely yet, but will have soon). A Boss. Red tape. Bureaucracy. Suits.
TPS Reports. Worthless meetings. Sub committees. Work that isn't "work". And
most importantly, corporate rules and protocol not in line with our
philosophies of living & working.

TicketStumbler is a bit of a different animal than most startups & companies.
I plan on writing about this extensively in the future
(<http://intheteeth.com>). I'm not saying acquisitions never make sense or
never add value or that I'll never have a Company that will be acquired...just
that TicketStumbler more than likely won't be "that" Company.

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maxklein
This just goes to show - if you build a strong brand name for a period of
time, the amount of money you can milk from that name is really really large.
Look at netscape. It has changed, but people know and recognize the brand, and
they keep going back.

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babooo404
does anyone actually use napster anymore?

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zacharye
"From the release, the proposed acquisition includes Napster’s approximately
700,000 digital entertainment subscribers..."

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halo
$173 per subscriber seems a little high to me.

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zhyder
Really? They're paying a little more than 1x the revenue per subscriber, which
sounds like a great deal. It's not an ad-supported web2.0 company.

~~~
liuliu
agree. It is not an ad-supported company which make its subscriber more
valuable because they actually paid.

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josefresco
Why is MarketWatch.com saying the price was $54 million?

[http://www.marketwatch.com/news/story/best-buy-acquire-
napst...](http://www.marketwatch.com/news/story/best-buy-acquire-
napster-54/story.aspx?guid=){08814974-C2C6-4134-BAE6-AC9651B16AB8}&dist=msr_2

^ holy mangled URL, so much for pasting that here.

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Kilimanjaro
Napster is so worthless right now that it is better to spend $1M (and save
$120M) in a couple of seasoned developers and start from scratch with some new
and fresh ideas.

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dmix
Ha Napster doesn't support OSX yet? I knew what I was getting into when I went
to the site but... wow.

