Napster, the original peer-to-peer music sharing network that has since transformed itself into a legal subscription service, is being acquired by Best Buy. The electronics retailing giant will be paying $121 million to buy Napster – a more than 85% premium to where Napster’s beleaguered shares were trading as of Friday.

Although Napster was able to sign up more than 700,000 subscribers, the service was never profitable and was on track to run out of cash sometime next year. Under Best Buy’s ownership, that problem is resolved, and the combined companies are confident that they can use Best Buy’s massive reach and distribution to improve the business, in addition to leveraging Napster to sell other digital products to consumers.

In corporate speak, Best Buy says “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions. We’re very excited to add these capabilities to leverage our existing relationships with the labels, the studios, and the hardware providers. We believe Napster will be an outstanding addition to our already robust portfolio of partners and offerings in the digital music space.”

While Napster was the first big name in online music (and actually sold its name for $8 million after being shut down by music industry lawsuits in 2002), it has been lapped many times over by Apple’s iTunes, with the pay-per-download model proving far more popular than all-you-can-eat subscriptions.

Napster has recently moved to catch up, launching a web-based version and offering DRM-free downloads. In the end, that wasn’t nearly enough to make Napster a successful standalone business, but Best Buy is certainly one of the more logical places for the company to land.

—Related Articles at Mashable - All That’s New on the Web:Napster Investor Settles Last Lawsuit for $130MNapster to Offer Wireless Downloads on AT&TNapster Launches a New Web-Based Version of Subscription ServiceNapster Loses CFO; Shares Hit a New LowNapster to Offer DRM-Free MP3 DownloadsWill 6 Million DRM-free MP3s Restore Napster’s Former Glory?Napster Raising Prices. Is it Going Out of Business?

Record label EMI will lay off 2,000 and shift its focus toward digital music, private equity investor and company topper Guy Hands told the Financial Times. Hands said the music industry operates on fallacies with origins in “the phenomenon of the 1990s and the CD” and as a result, companies like EMI are hemorrhaging cash. EMI, for instance, spends $50 million a year destroying unsold CDs. Guess whose model Hands said the industry should follow to turn itself around?

Hands said to look to Radiohead, a band which spurned EMI when it allowed fans to download a low-fidelity copy of a new record and pay whatever price they chose. (Photo by wwhyte1968)

The SF New Tech Meetup is showing mercifully short 5-minute demos from startups. Just think of all the BlackBerry messages you can catch up on in five minutes! If that doesn’t sound like fun, join a discussion on viral Facebook apps in Palo Alto.

Got something to add to the calendar? Send it to calendar@valleywag.com.

Source:Valleywag

Is Europe a country? The question puzzled gameshow contestant Kellie Pickler. And now even the European Commission seems confused. Apple has appeased the pangovernmental body by offering Britons the same price for iTunes downloads as the Continentals. But the original complaint remains unaddressed: Why can’t Europeans shop at any national iTunes store, since the region is ostensibly one open market?

Jonathan Todd, the commission’s antitrust spokesman, states:

Contrary to what we had been led to believe, the fact that the same content is not available in all EU countries is not the result of restricted business practices between Apple and the record companies, but of the restricting copyright legislation.

So it’s the government’s fault after all. Glad we cleared that up! The European Commission is eager to make companies do its bidding, but getting fractious nation-states to update their laws appears to be beyond its ken.

Some will view Apple’s statement that it “will reconsider its continuing relationship in the UK with any record label that does not lower its wholesale prices in the U.K. to the pan-European level within six months,” as bullying. But this is the reality: If anyone has the clout to force changes in the music industry and its regulatory regime, it’s not the European Commission. It’s Steve Jobs, savior of iPod users everywhere.

Drew Schutte, the longtime publisher of Conde Nast’s Wired, will now run the sales side of The New Yorker and its website. David Carey, publisher of Portfolio, is adding Wired to his responsibilities. [BusinessWeek]

Source:Valleywag

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After warning me that he was coming to the CES Press Room and to “stay out of his face,” blog blowhard Jason Calacanis stormed over to me to “introduce” himself and slam my boss and brag about how much money he has. Money can’t buy you a snappy comeback, however.

When Calacanis was almost out the door, I yelled across the room, “Google’s better!” — than Mahalo (there’s your link, now quit your bitching), that is, the “human-powered” search engine that’s currently keeping Calacanis off the street. Having no response, he slunk out the door to peels of laughter.

Source:Valleywag

Can you legally create MP3s from your CD collection, or not? That’s all we want to know. News has circulated since early December that the recording industry believes it is illegal to rip your music library . The genesis of this waas an RIAA lawsuit against a chap for tossing ripped files into his Kazaa sharing folder — not, mind you, for actually ripping the files off a CD. We ridiculed the Washington Post for making this mistake, and were prepared to laugh derisively when it ran a correction. But a Wired blogger argues, at length — 745 agonizing words — that the RIAA still thinks CD ripping is illegal. Here are the 100 most essential words.

The RIAA does not recognize that you have a legal right to rip your CDs into MP3s. The RIAA will not say that ripping MP3s for personal use is legal. That’s why the Sony executive said ripping a song was the same as stealing one. To sum up, the RIAA does believe a majority of American music buyers are thieving criminals, but it’s not going to sue anyone over ripping MP3s because a) it’s not really a big deal b) there’s no way to find out and/or c) it would be terrible publicity to sue someone for using an iPod.

Digital music sales surged 50 percent above 2006’s tally, totaling 844.2 million tracks sold in the U.S. in 2007. Unfortunately, CD sales didn’t fare so well, dropping 14 percent. [Ars Technica]

The Washington Post has reported that the RIAA views the ripping of CDs to MP3s as illegal. Not quite so. The RIAA isn’t thrilled with the practice, but that’s not why they’re suing Jeffrey Howell. His offense against the recording industry was “putting those ripped files into a shared Kazaa folder,” notes Techdirt. You know, the sort of thing one would do if he would want to participate in file sharing.

The decision by the Australian government to institute filtering of the Internet at the ISP level to protect children from pornography and violent websites is being received with anger and comparisons to the Great Firewall of China. Of course, these critics are ignoring reality.

For starters, anyone can opt out of the filtering, which is simliar to what numerous European countries have mandated for years. Moreover, many ISPS already screen content. Why is this kicking up a fuss? Because of three predictable truths: Governments love to play nanny, Web-filtering software makers love to ring up sales, and bloggers love to bloviate about “freedom.” (Photo by Saad)

Source:Valleywag

The iTunes effect — or file-sharing, if you prefer — was in full force this holiday season. Album sales plunged 18 percent compared with pre-Christmas week sales in 2006. [Variety]

Michael Bull, a film and media professor at England’s University of Sussex, has spent three years interviewing more than 1,000 iPod owners — only to reach the most of obvious conclusions. In the process, Bull dubbed himself Professor iPod and won a book deal. The book, Sound Moves: iPod Culture and Urban Experience, holds no revelations: People carry their digital content around with them, relying on it to get them through the day. iPod owners use the devices to create personalized, controlled environments insulated from the dislocation of their work lives and the cacophony of the city. Is it any shock Apple found his research worthless?

When asked by Wired whether Apple had shown any interest in his research, the aptly name Bull replied:

The head of Apple’s research division contacted me and said he wanted our results, and I said, “I don’t have any.” He wanted the quantity of things, and I said, “Well, I could give a seminar or come talk,” and he said, “Well, if there were no results, I can’t make time for you.”

Does Steve Jobs need a university professor to repeat to him the promises Jobs made to customers from the very introduction of the iPod in October 2001? Perhaps Bull should find a new market: All the gadget makers trying to compete with Apple, since they’re the ones who seem to keep missing the obvious.

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Gizmodo found this clip of 60 Minutes interviewing Microsoft chairman Bill Gates. Gates barely gets started explaining precisely how smart he is before a panhandler taps on the window of Dick’s Drive-In Restaurant, the Seattle burger joint where Gates has just ordered a $1.70 “deluxe.” Can Gates spare some change? Nah. $36 billion, maybe, but not some change.

Source:Valleywag

Why did FuckedCompany creator Philip “Pud” Kaplan record a profane song, “Fuck,” in August under the name “Farty McPoopants”? The pseudonym is easy enough to explain: His current venture is AdBrite, an online-advertising network. And selling ads is a business that’s all about keeping up appearances. Given his past, you’d think Kaplan wouldn’t be so sensitive. But even Kaplan knew he couldn’t blow his cool. His company, an online-advertising network, was in the midst of a tense negotiation with porn-ads partner AVN, and trying to raise a new round of financing.

August 30 was an especially bad day. The previous month, an outage at the 365 Main datacenter had brought down AdBrite’s entire ad network. Subsequently, AVN and AdBrite had jockeyed over their joint network’s AVNads.com website, and the spat had threatened the company’s efforts to raise more money — a fact Valleywag reported the day before Kaplan uploaded his song. Anyone would sing the blues.

Things got better after Kaplan got “Fuck” out of his system. Sequoia Capital, AdBrite’s previous venture backer, came through with $23 million in fresh funds. And AdBrite and AVN finally worked out an amicable split, with both companies starting their own, competing ad networks — and sneakily trying to poach each other’s customers.

Kaplan, driven, he admits, by vanity, has now come out as the author of “Fuck”, a brilliant ditty one blogger called the “greatest and best song in the world”. I’m having a hard time disagreeing. You can play the song below and judge for yourself.

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Fuck by Farty McPoopants

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(Photo by Scott Beale/Laughing Squid)