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Sources said MP3.com wants around $50 a share, which would value the company at about $2.5 billion. Yahoo is said to be looking to pay $30 a share.
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YAHOO IN TALKS WITH MP3.COM

As Talks With MyPlay Break Down, Portal Turns Its Attention To Embattled Dot-Com
Mega portal Yahoo has expressed an interest in purchasing online music distributor MP3.com, insiders at MP3.com confirmed.

Speculation abounds that MP3.com has to make a play in order to "monetize" its My.MP3.com service, following the sudden huge expenditures it now faces through its licensing agreements with the major labels.

Sources said MP3.com wants around $50 a share, which would value the company at about $2.5 billion. Yahoo is said to be looking to pay $30 a share.

There is also speculation about the status of the relationship between MP3.com CEO michael robertson',390,400);">michael robertson',390,400);">Michael Robertson and MP3.com President/COO Robin Richards. Are there new tensions caused by strategic differences for the company's future? And is there some dissatisfaction with the results of the settlements with the Big Five?

Analysts have said that Yahoo needs to make a deal to get into the burgeoning online music space. Talk of the company buying MP3.com competitor MyPlay.com have slowed, primarily because of MyPlay's existing deals with AOL's Winamp and Spinner, sources said. However, there is chatter that AOL and MyPlay may team with Universal and Sony to launch a competitive service to My.MP3.

Following MP3.com's landmark licensing deals with BMG and WMG last week, insiders have watched MP3.com's stock price fluctuate. The vacillation is an indicator of lingering concerns about the ability of Robertson's trailblazing dot-com to make its My.MP3.com service—which will stream the agreed-upon major-label content—profitable enough to justify the $100 million in damages and the 1.5 cents-per-stored track and 1/3 cent-per-streamed-track royalty rate that came out of the settlement (hitsdailydouble.com, 6/8).

Robertson. who has repeatedly said his company was not for sale, has pledged to keep the My.MP3.com service free, though recent speeches have dwelt substantially on the attractiveness of subscription models. But even if MP3.com charges users a monthly fee (like the $9.95 it now asks for a streaming classical-music service), will this be enough to "monetize" the serious bucks the dot-com must fork over to the majors?

MP3.com is close to striking additional licensing agreements with Sony and EMI but is far from nailing marketshare leader Universal Music Group, which insiders said, is of major concern. UMG, which, as part of Seagram, will likely be acquired by European giant Vivendi and folded into an international Net play, is expected to carry on its litigation against MP3.com.

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