Google denies Napster tie-up, music store plan

Google squashed recent rumors that it is planning to buy Napster and build its own online music store.

Google on Tuesday refuted recent reports that it will open an online music store and that it plans to acquire Napster.

In the digital music market, Google is sticking with its strategy of delivering music-related information via its search engine and providing its users with links to third-party online music stores, the Mountain View, California, company said in a statement.

Napster's stock shot up more than 50 percent at one point on Tuesday after the New York Post reported in an anonymously-sourced article that Google "is considering an extensive alliance with Napster, which could include an outright acquisition."

Napster operates an online music store and an online music subscription service, a hybrid model in this market. Users can purchase songs or entire albums, download them from the store and keep them forever. They can also pay a monthly fee and get unlimited access to the contents of the Napster music library.

Napster's stock closed at US$3.12 per share on Monday, but climbed as high as US$4.95 on Tuesday, fueled by the Post story. At press time, it was trading at US$3.77, up about 21 percent. In the past 12 months, it has fluctuated between US$2.95 and US$9.84.

Last week, Bear Stearns & Co. financial analysts speculated in a research report that Google is building an online music store to rival Apple Computer's iTunes.

Making clear that Google hadn't confirmed their speculation, the analysts wrote that they expect the search giant to release a beta, or test, online music store in the next three to six months.

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Juan Carlos Perez

IDG News Service

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