America Online said Nov. 3 it has purchased from Circuit City the electronics retailer's MusicNow asset for an undisclosed amount, giving the Time Warner unit a service that looks a lot like the legit

(The Hollywood Reporter) -- America Online said Nov. 3 it has purchased from Circuit City the electronics retailer's MusicNow asset for an undisclosed amount, giving the Time Warner unit a service that looks a lot like the legitimate Napster.

The acquisition marks AOL's fourth this year, having previously purchased Weblogs, Xdrive and Wildseed.

AOL said it will operate the new acquisition as AOL Music Now and will move its 450,000 MusicNet@AOL subscribers to the new service. MusicNet@AOL is powered by MusicNet, a business-to-business Internet solution founded by Time Warner, RealNetworks and a host of record labels, though sold earlier this year to Baker Capital.

The new AOL Music Now will charge $9.95 per month to subscribers who get access on their computers to more than 1 million songs. For $14.95 a month, users get computer access and the ability to move songs to a compatible music device, a service AOL will call PlaysForSure and that is similar to NapsterToGo.

The new AOL Music Now also will sell tracks for 99 cents apiece to any Internet user, not just subscribers, as had been the case with MusicNet@AOL.

The news comes as AOL, a much-maligned asset of the world's largest media conglomerate, enjoys renewed respect for its strategy of opening up to the universe of Internet users services that had previously been available only to AOL's dwindling subscriber base. The success of the initiative has companies like Google, Yahoo! and Microsoft rumored to be interested in partnering with, investing in or even purchasing AOL.

AOL's new music service also makes it more of a competitor with industry giant Apple Computer's iTunes, though AOL also has been a partner with iTunes for two years -- and continues to be -- by driving AOL users to iTunes.

MusicNow was founded in 1999 as FullAudio and was purchased last year by Circuit City. AOL says the unit will remain based in Chicago where its 40 employees, including president Gary Cohen, will answer to Amit Shafrir, president of AOL Premium Services.

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