Google denies it is eyeing Napster
Internet search firm refutes NY Post story, saying it is not considering purchase of online music service; Napster shares trim gains.
NEW YORK (CNNMoney.com) - Internet search firm Google denied earlier reports that it is weighing a possible purchase of Napster, company representatives told Reuters Tuesday.
"We have no plans to acquire Napster, nor do we have plans to develop a music store at this time," Google spokeswoman Sonya Boralv said in a statement, Reuters reported.
A UK-based spokesman for Napster declined to respond to requests for comment, but did tell the news service last week that the company was not up for sale.
"The company is not looking to be sold, the management is not looking to step out. It's simply not true," a Napster spokesman said at a music conference.
Napster, created in 1999 by college student Shawn Fanning as a free music download service, was forced into bankruptcy by a music industry lawsuit, then was reborn as a pay music service after it was purchased by software company Roxio. It has yet to report a profit under its new business structure, and it has a market capitalization of about $137 million.
Google could easily afford to purchase Napster. It has $7.6 billion in cash and cash equivalents on its balance sheet and is expected to report fourth-quarter earnings nearly double year-earlier levels after the market close Tuesday.
Google has long been rumored to be looking at a music service, which has become a major profit driver for Apple (Research). The Post reports that Robert Peck, an analyst at Bear Stearns who covers Google, wrote in a recent research report, "We believe Google is in the midst of creating its own iTunes competitor."
Google is scheduled to reports its fourth-quarter earnings late Tuesday.
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