• NY Post (free registration required), Wednesday, February 1, 2006 10:15 AM

The New York Post reports that Google is considering an "extensive alliance" with Napster, including a possible acquisition. In lieu of building its own online music store, the search giant has been pushing to align with the struggling music subscription service. While the rumor that Google wants to move into digital music has been floating around for some time, the company would only say,"We have nothing to announce at this time." However, in a recent research report, a Bear Sterns analyst said he believes Google is in the midst of creating an iTunes competitor, which he said would be announced in the next three to six months. He wrote that such a move would be "logical" and "fits with Google's recent moves and its ultimate goal of organizing the world's information." Both companies declined to comment on the NY Post rumor; Google dismissed it as speculation. Napster, which relaunched in 2003 after being purchased by the software company Roxio, is not profitable, reporting a net loss of $13.6 million in the third quarter after more than doubling its revenue from the prior year. The investment firm Stifel Nicolaus estimated Napster's takeover value at between $3 and $5 per share.

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