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BERTELSMANN TO ACQUIRE ONLINE MUSIC LOCKER

Consumers Will Soon Be Able to Store CDs, Homework, Old Gym Shoes Electronically
In another obvious step toward world domination, Bertelsmann eCommerce Group today will announce plans to acquire online music locker Myplay, according to sources familiar with the deal.

Along with the acquisition, BeCG will consolidate its online music holdings into a separate company called BeMusic, which will comprise Myplay, CDNow, BMG Music Service and the company's stake in Napster. This will allow consumers the ability to store digital versions of their CDNow and BMG Music Service purchases on Myplay.

Sources said Napster's and Myplay's subscription services would co-exist, but Napster would not receive access to Myplay’s locker combination—leaving its Algebra textbook and NSYNC pinup safe inside. According to the New York Times, the fact that Bertelsmann has agreed to acquire the company for $30 million was unrelated to its effort to turn Napster into a legitimate service.

Myplay has attracted more than 5 million users since 1999 when it was started in Redwood City, CA. The company has not been dealt the same legal challenges as other music dot-coms, such as Aimster and Launch Media, because it requires users to upload and "rip" songs from their own CDs. However, Myplay still has licensing agreements with major record labels, fending off rumors that it does not get along well with others.

Bertelsmann's acquisition of Myplay follows closely on the heels of Vivendi Universal's $372 million acquisition of its competitor in the field, MP3.com, as hitsdailydouble reported. Universal also originally funded another music-locker service, MusicBank, which went out of business before launching its commercial service, which included giving away a single toaster with the opening of each account.

Sources say Bertelsmann chief Thomas Middelhoff began negotiations with Myplay soon afterwards, out of fear that a rival company—especially the French—might beat him to his goal of world domination.

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