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Friday, 5 April, 2002, 15:55 GMT 16:55 UK
Bertelsmann 'steps up' Napster bid
Napster logo
German media giant Bertelsmann has made a formal offer to buy the online music-swapping service Napster, a report said.


We have made them an offer because we believe that our strategy is the right one for the future of the company

Thomas Middelhoff
chief executive
Bertelsmann
"Our solution now is to completely take over Napster," Bertelsmann's chief executive, Thomas Middelhoff, said in an interview with German newspaper Die Welt.

"We want to buy out the original shareholders.

"We have made them an offer because we believe that our strategy is the right one for the future of the company."

Bertelsmann's ambition to take over its former foe had been known already, but formal bids have only recently been put forward.

Subscription service

Napster was shut down by a court order last summer for copyright infringements following a lawsuit brought by a group of large media groups.

Shawn Fanning started the service as a 19-year-old
Shawn Fanning started the service as a 19-year-old

Bertelsmann, which is a former member of the group, wants to turn the song-swapping service into a legal online music subscription service.

But its attempts to buy Napster are proving difficult due to a legal battle between two of Napster's main shareholders, venture capitalist Hummer Winblad Venture and John Fanning, uncle of Napster founder Shawn Fanning.

The shareholders disagree on how to split the cash between them once Napster is sold.

Bertelsmann has not divulged the size of its offer, but observers estimate the bid at 15-30m.

Delays

Napster's relaunch as a legal, paid-for service has been delayed several times since it was shut down last July.

Technical and legal hitches linked to the licensing of copyrighted music have caused the delays.

Napster chief executive Konrad Hilbers has said that big players in the music industry are keen to force it out of business.

Or, at least, they have been keen delay the relaunch while they develop their own subscription systems for music downloads.

See also:

27 Mar 02 | New Media
Napster delayed despite legal win
26 Mar 02 | New Media
Napster must stay shut down
23 Feb 02 | Business
Judge grants Napster respite
20 Feb 02 | New Media
Digital music deadline expires
08 Feb 02 | New Media
Music industry's digital plans 'fail'
24 Jan 02 | New Media
Napster wins time to settle
10 Jan 02 | New Media
Napster tests legal song-swap service
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