RealNetworks to Buy Listen.com for $36M
SEATTLE (AP) — RealNetworks Inc. will acquire Listen.com and its Rhapsody digital music subscription business for about $36 million in cash and stock, the companies said Monday.
The deal, which is expected to close in 60 to 90 days, deepens Seattle-based RealNetworks’ offerings and expands its reach in the burgeoning business of offering music over the Internet.
Privately held Listen.com, based in San Francisco, has “tens of thousands of subscribers,” the company said.
They can play, download and burn CD’s over the Internet from Listen.com’s library of more than 300,000 songs owned by the five major record labels and independent artists. Listen.com also has deals with 15 high-speed Internet network companies, including Time Warner Cable, Charter Communications and Verizon Online, to distribute its offerings.
The acquisition, said RealNetworks chief executive Rob Glaser, complements his company’s own rapidly growing subscription service, RealOne SuperPass. That service sells monthly subscriptions to about 900,000 consumers for exclusive news, sports, computer games and other entertainment.
Listen.com’s 53 employees will join RealNetworks, and remain in San Francisco.
The deal follows an earlier investment in February by RealNetworks as the Seattle company and others cast about for ways to tap the promise of legal digital distribution of music without incurring the wrath of record labels who are trying to crack down on illegal sharing of music files over the Internet.
RealNetworks will pay about $17.3 million in cash and 4.1 million shares of RealNetworks stock – worth about $19 million on Monday. Shares of RealNetworks closed Monday up 6 cents to $4.64 a share on the Nasdaq Stock Market.
The company will also continue its partnership with AOL Time Warner, Bertelsmann and EMI in MusicNet, which similarly distributes music over the Internet.
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