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Emusic.com to buy Cductive.com

Emusic.com Inc. (Nasdaq: EMUS) said Tuesday it will buy privately held Cductive.com in a stock-for-stock transaction worth about $38 million.

Emusic.com, a seller of downloadable music on the Internet, closed at 11 1/2 Monday. The stock has fizzled since this summer, when it got a boost from Emusic.com's collaboration with America Online Inc. (NYSE:AOL) to distribute digital music over AOL's Web sites.

When complete, the deal will combine Emusic.com's exclusive licensing agreements with over 150 independent record labels representing over 30,000 tracks for purchase, with Cductive.com's representation rights for 350 independent labels in the U.S. Europe, and Japan, covering 65,000 trackss, the companies said. The acquisition is expected to close by the end of the year.

Competitor MP3.com Inc. (Nasdaq: MPPP) has a library of more than 100,000 songs from some 22,000 artists, many of whom who are independent. The company, which made its debut in July, has been slowly climbing.

In other online music news Tuesday, CDNow (Nasdaq: CDNW) said it was granted a patent for its technology that creates custom CDs. CDnow said it was "also the exclusive licensee to patent no. 5,592,511, entitled 'Digital customized audio products with user created data and associated distribution and production system.'"

In July, CDNow said it will merge with Columbia House, which is owned by Sony Corp. (NYSE: SNE) and Time Warner (NYSE: TWX). The deal should be completed by year-end or early 2000.

Reuters contributed to this report.