Best Buy To Buy Rebel Leader Napster

Napster homepageBest Buy reported Monday that it would acquire Napster for $121 million, or $2.65 a share, along with the online music site's long-held brand reputation for being a rebel leader.

Napster launched in 1999 as an online music-sharing site through peer-to-peer technology, but was shut down within a couple of years while defending a copyright lawsuit brought on by the Recording Industry Association of America. After it fixed that problem, it was purchased by Roxio.

Some branding experts believe Napster's reputation could prove beneficial to Best Buy. The deal could give the big-box retailer the advantage needed to convince consumers it offers an alternative to Apple's iTunes or RealNetworks' Rhapsody for online music and movies.

"Napster has a bit of an edge because it's still known as the renegade brand with younger people," says Allen Adamson, managing director of Landor Associates, a New York brand consultancy firm. "In general, the Best Buy brand has been known as big, slow and stodgy. Creating a link between the two brands in the short term could be positive because it shows they are hooking up with edgy brands."



Adamson says Best Buy needs to maintain a reputation for being a hip, happening place because much of its business targets young adults looking to purchase electronic goods.

But Al Ries, branding expert and chairman at Ries & Ries, says companies often get into trouble when they venture outside their expertise. "What are they thinking?" he asks rhetorically. "I don't know any retailers that have been successful selling music online. Walmart has tried but doesn't appear to have had much success."


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