Digital media firm Roxio Inc. has completed the sale of its consumer software division to Sonic Solutions, meaning that it will enter 2005 able to focus on the Napster online music service as its main
Digital media firm Roxio Inc. has completed the sale of its consumer software division to Sonic Solutions, meaning that it will enter 2005 able to focus on the Napster online music service as its main operation. The sale was first announced in August.
Management's decision this year to dispose of its software business earned mixed reviews, with some observers raving that the company will be able to better concentrate on Napster, while others warned that the firm is betting all its money on the still-developing online music sector.
With the sale of its software unit, the company is changing its name to Napster, with its shares set to begin trading under the new ticker symbol NAPS on Jan. 3.
"We are very pleased to have closed this transaction before the end of 2004 so we can now focus 100% of our efforts on taking Napster to new levels of success," chairman/CEO Chris Gorog says.
The software sale has been approved by the boards of both companies, and stockholder approval is not necessary, according to Napster brass. "Roxio had filed a preliminary proxy to solicit stockholder approval of the transaction, but recent developments in Delaware corporate law and the recent growth of the Napster service have made a stockholder vote unnecessary," the firm says.
Executives from various major music companies have said they expect 2005 to be the year when digital music will become a significant revenue contributor. As a result, the growth of Napster and other Web-based music providers, like Apple Computer's market leader iTunes, will be in sharp focus next year.
For the six months ending Sept. 30, Napster reported online music revenue of $17.2 million on costs of $13.9 million.
The company's shares closed yesterday (Dec. 20) down 0.4% at $7.84.