America Online is to acquire two key Internet music companies for $400 million in stock in a bid to get a head start in the field.
AOL confirmed it is to buy Spinner Networks and Nullsoft. Spinner.com is a music broadcasting service that features over 175,000 tracks from 350 labels. Nullsoft is the developer of the de facto standard MP3 player, Winamp and Shoutcast streaming technology.
AOL's move will be a definite bonus for the MP3 standard, despite music industry protests that it leaves them wide open to Internet piracy. In doing so, however, AOL has put itself head to head with Realnetworks which released its own downloadable music player last month.
AOL will also face stiff competition from Yahoo, which has agreed to acquire Broadcast.com in a $5.7 billion deal and Lycos with its Lycos Radio Network. Yahoo has also just confirmed it is to set up a 10 channel radio network based on Spinner programming technology.
"Combining these leading Internet music brands with the audience reach of our brands will lift music online to the next level of popularity," said AOL chief operating officer, Bob Pittman
"We plan to build downloadable music, Internet radio and overall music features into each of our brands, as well as customise them for the audience and partners of each of our brands," Pittman said.
Pittman has a wealth of experience in the radio and music fields, having pioneered MTV and served as a radio station programmer.
AOL said it will use the Spinner and Nullsoft technologies and programming to allow consumers to play all leading formats of Internet music, including Liquid Audio, AT&T's a2b and the Secure Digital Music Initiative (SDMI).
The technologies will deliver live and Internet-only radio, sports, and music. It also plans to develop the Spinner, Winamp, and Shoutcast brands to create custom branded music services for AOL's online service and its AOL.comWeb directory, as well as its Compuserve, Netcenter and ICQ services.
Future plans include delivering music over a range of communication devices including handheld computers, TVs and other portable devices as part of the AOL Anywhere strategy, confirmed the company.
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