CNET también está disponible en español.

Ir a español

Don't show this again

Internet

Vivendi may buy EMusic

Media giant Vivendi Universal is in negotiations to buy one of the earliest commercial MP3 download companies, with a deal expected soon, a source close to the companies confirms.

Media giant Vivendi Universal is in negotiations to buy EMusic, one of the earliest commercial MP3 download companies, with a deal expected as soon as next week, a source close to the companies confirmed.

EMusic has struggled to persuade customers to pay for its catalog of downloads or for a newer subscription service. Once seen as a promising model for music distribution, EMusic's business--and stock price--has been one of the clearest casualties of Napster's ability to provide much of the same music free on its file-swapping service.

EMusic publicly stated Thursday morning that it was in talks with a "major media company" but declined to name the potential partner. Citing an unnamed source, The Washington Post reported that Vivendi Universal's Universal Music Group plans to use the site as a place to offer downloads from the Duet subscription music service it is launching with Sony Music Entertainment.

The Duet partnership struck its first public distribution deal Thursday, as Yahoo said it will offer music from the labels as part of a subscription service on Yahoo Music.

EMusic said it has agreed to a short period of exclusive negotiations with its potential partner, though it warned that the deal could fall through. A company release cited a tentative purchase price of 57 cents a share, marking a substantial premium on the stock's present level.

Shares of EMusic started the day at just 21 cents but jumped 57 percent to 34 cents by the 1 p.m. PT close of regular trading.

The company also said Thursday that it expects the Nasdaq Stock Market to delist its shares shortly, although executives say they will appeal such a decision. The stock has been trading below $1 all year.

Executives gave early first-quarter earnings estimates, saying they will announce revenue of $4.2 million, with $2.2 million from music sales. Last quarter, EMusic announced revenue of $4.7 million.

News.com's Jim Hu contributed to this report.