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Bertelsmann Buys Myplay for $30 Million, Adds 'Missing Link to Online Chain'

30 May, 2001 By: Hive News

In a continuing effort to consoliodate its online music resources, German media conglomerate Bertelsmann AG announced Wednesday it was buying Myplay Inc., which has the technology to allow users to store songs on the Internet.

With the $30 million acquisition, Bertelsmann will combine Myplay, a Redwood City, Calif. company, with its other music distributionbusinesses, which include the online retailer CDNow and BMG music club, into a new entity called BeMusic.

Myplay, which claims more than 6.5 million users, offers users a free service of storing music files on the Internet in digital "lockers."

Bertelsmann hopes that this storage technology will allow listeners easier access to their own music, whether on desktop and laptop computers or on portable devices such as mobile phones and handheld computer devices.

"This is the final mosaic in our digital music delivery chain," company spokesman Alexander Adler said. "Digital music storage has been the missing link."

Launched in 1999, Myplay has yet to turn a profit, and recently laid off almost half of its staff. The company's 31 remaining employees will work for BeMusic.

Bertelsmann, which had broken ranks with other music companies by teaming with copyright violator Napster -- since crippled by lawsuits -- loaned Napster money to develop a legal version of its service. The companies have said they hope to introduce the service this summer. Napster's role into Bertelsmann's online music delivery strategy isn't yet clear.

Bertelsmann has also backed online music distribution venture MusicNet, a subscription-based music streaming and download servicescheduled to debut this year. MusicNet is also supported by major music groups AOL Time Warner Inc. and EMI Group.

Sony and Universal, the other two major music companies, are pursuing a separate online music venture called Duet. Universal, a unit of theFrench conglomerate Vivendi Universal also acquired MP3.com for $372 million.

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