RealNetworks announced today that it has entered into a definitive agreement to acquire Listen.com, the name behind the Rhapsody music subscription service, in a cash and stock deal worth approximately $36m (£23m).
The company claimed that combining Rhapsody with RealNetwork's RealOne music subscription service will accelerate the adoption of legitimate digital music services.
"The opportunity for us to add Listen.com's Rhapsody, the best music subscription service, into our family of services was just too compelling to pass up," said Rob Glaser, chief executive at RealNetworks.
"Rhapsody has pioneered a number of important capabilities, such as integrating artist guides and customised radio stations within a music subscription service, and its innovative hybrid streaming and caching technology."
RealNetworks promised "operational efficiencies" from integrating Rhapsody with the RealOne subscription service.
The company also said that Listen.com's distribution arrangements and technology partnerships with broadband cable and DSL providers, online music sites, computer manufacturers and consumer electronics companies would improve the reach of its own subscription offerings.
Listen.com has distribution agreements with a network of more than 15 companies, including Time Warner Cable's Road Runner, Charter Communications, Verizon Online, Sprint, Cablevision Systems Corporation's Optimum Online, Gateway, Lycos, RCN Corporation and Sony's Musiclub.
The acquisition follows RealNetworks' investment in Listen.com announced in February.
The parties expect the acquisition to close late in the second quarter, or early in the third quarter, of 2003 subject to regulatory hearings.
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