• CNNMoney.com, Friday, October 27, 2006 11:47 AM

Napster, Inc. the former poster-child for online piracy, is now one of the Web's biggest legitimate online music services. But, three years after taking the legal route, it's still not making any money. Now it's up for sale.

Surprisingly, the service is attracting a swarm of investors. Wall Street expects the company to lose $1.03 per share for the year ending March 2007, and $0.83 cents per share in fiscal 2008. And yet, so far, the stock is up 25 percent this year. What gives? Does anybody really think it can turn Napster into a legitimate iTunes competitor? It's the brand name. Napster is synonymous with online music, and the "illegal" stigma is fading.

It just needs deeper pockets. Like Microsoft or Google deep, analysts say. Since the company announced its intention to sell early last month, rumors have swirled that Google is interested in making waves in online music. Valued at $200 million, Napster would be nothing for the search giant, which has $10 billion in cash. It would be a nice little exit, too, for Napster, Inc.--formerly known as Roxio, which picked up the defunct file-sharing service name for $2.4 million in 2002.

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