14 DAY TRIAL // Yesterday, according to a New York Post, Google was looking to get its own music service going and was considering aligning or even purchasing Napster. As a result of this report, Google shares bloated as much as 25%, but the stock gave back more than over half those gains after a Google spokesperson denied such takeover interest.
A Google spokesperson, in an emailed response to MarketWatch, said the company has "no plans to acquire Napster, nor do we have plans to develop a music store at this time."
Such a move by Google was expected by many analysts, and would only have been a small step away from the Google Video service it currently offers, however, although the official word from Google on that one is "no," that still leaves the question of what exactly do they mean by 'at this time'.
"'For a company to acquire Napster at this point doesn't make that much sense,' said analyst PJ McNealy of American Technology Research, who covers Napster. 'Napster's business model is still unproven and in a 'show me' mode.' Recently, the Los Angeles-based company cut about 10 middle managers from its payroll. Napster said that the 'management redundancies' were attributable to a consolidation of an online music subscription service and music sales effort," Bartash and Banerjee report for MarketWatch.