America Online Inc has agreed to spend $400m to acquire two privately-held internet music companies, Spinner Networks Inc and Nullsoft Inc. Spinner is billed as the leading internet music broadcaster and claims to currently broadcast two million songs daily. Spinner.com is said to attract 1.5 million unique users per month and offers links that enable instant ordering of the music being played. Nullsoft, meanwhile, is the developer of the Winamp MP3 player for Windows, and Shoutcast, an MP3 streaming audio system which allows individuals to broadcast their own content over the web. Winamp boasts an installed base of five million users
AOL says the acquisition of the two web music pioneers and their associated brands will allow the online giant to deploy custom- branded music features across all of its properties and help it develop music capabilities for AOL Anywhere portable devices and future broadband initiatives. It plans to build downloadable music and internet radio features into the AOL, AOL.Com, CompuServe, Netcenter and ICQ brands. The company also reckons that the combination of the acquired technology with its massive audience reach will hasten the overall popularity of online music, especially as broadband services evolve.
The deal will be carried out as a tax-free, stock-for-stock, pooling-of-interests transaction and is valued at roughly $400m, although no further details were disclosed. After the deal is completed, four-year-old Spinner will remain based in San Francisco, while three-year-old Nullsoft will move its operations there from Sedona, Arizona as the two operations merge. á
