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AOL's got MusicNow

Time Warner's America Online acquires company in a move to revamp its music customization, personalization features.

America Online announced on Thursday that it has acquired MusicNow.

With the technology of the Chicago-based online music service, which Circuit City Stores bought in 2004, the Time Warner Internet company plans to revamp its music customization and personalization features. AOL will gradually upgrade its current MusicNet AOL subscribers to a new service, called AOL Music Now.

Competition among online music providers is becoming increasingly intense. Customers have shown an insatiable appetite for acquiring their music through nontraditional means ranging from cell phones to peer-to-peer networks.

"The easy-to-use features for music browsing, discovering, sharing and purchasing of MusicNow provides a new level of customization and personalization of online music," Ed Fish, senior vice president and general manager of AOL Premium Services, said in a statement.

AOL Music Now features custom playlists and community features such as viewing and sharing music profiles with other visitors. The new service will also offer more than a million songs from EMI Music, Sony BMG Music Entertainment, Universal Music Group and Warner Music Group.

Users will have the option of purchasing music for 99 cents per song or paying subscription rates of $9.95 per month for unlimited streaming and downloading to a computer. For $14.95 per month, subscribers can also download music to a PlayforSure-compatible portable music device.

AOL Music Now will operate as a wholly owned subsidiary of AOL Premium Services, and the operations of the former MusicNow will continue to reside in Chicago. MusicNow employs 40 people.

Financial terms of the deal were not disclosed.