Just a week after acquiring the subscriber base of the now-defunct Virgin Digital subscription service, Napster is taking over as the official music subscription service for AOL Music.

AOL has dumped the Music Now service, which it acquired from Circuit City in 2005 to replace its original music subscription service, and is shifting the 350,000 subscribers to the Napster service. AOL is notifying all Music Now customers that their accounts will automatically migrate to Napster unless they opt out. Their current member ID, passwords and billing information will all transfer directly to Napster.

Taking a step past the Virgin Digital deal, Napster will recreate Music Now members' entire music libraries, meaning they won't have to redownload all their subscription tracks. Napster will also honor all existing Music Now credits and maintain the existing Music Now pricing tiers.

AOL will continue to generate incremental revenue from the deal through an affiliate relationship with Napster. AOL will promote the Napster service throughout its various sites, and will receive a percentage of each resulting Napster subscriber -- much like other sites have affiliate relationships with iTunes.

The migration will take place over the next 60 days. Assuming all or most of the AOL customers choose to accept the transition, Napster CEO Chris Gorog says the deal will give Napster the second largest digital music revenue stream after iTunes.

The move marks the latest in an interesting trend for Napster. Last fall, the company revealed it had hired investment bank UBS to help it consider new strategic directions, including the possibility of a sale. Now, rather than being acquired, Napster is doing the bulk of the acquiring -- folding in the subscriber assets of competitors.

Napster representatives say the company remains in talks with several potential acquirers, but nothing imminent is expected at this time. However it's possible that acquiring the subscriber base of both the Virgin Digital and AOL may serve to fatten up the company -- making it look more attractive to potential acquirers which could help spur those talks along further.