RealTime IT News

AOL Gobbles Up Two MP3 Firms

America Online, Inc. Tuesday became the latest Internet giant to dive into the Internet music world by acquiring Spinner Networks, Inc. and Nullsoft, Inc., maker of the popular Winamp MP3 player, in stock deals worth a combined value of $400 million.

AOL plans to build branding of Spinner and Nullsoft's Winamp and SHOUTcast, develop custom-branded music services for the AOL Network, and offer Internet-only radio services and music downloads as part of its site features.

"Combining these leading Internet music brands with the audience reach of our brands will lift music online to the next level of popularity," said Bob Pittman, president and COO of AOL. "We plan to build downloadable music, Internet radio and overall music features into each of our brands, as well as customize them for the audience and partners of each of our brands."

AOL said the acquisitions will extend its leadership in Internet music by marketing MP3 to all of AOL's consumers and providing current partners with new applications.

Spinner.com currently boasts 1.5 million unique users each month, with 2 million songs broadcast daily on its SpinnerPlus music download application.

Nullsoft claims 15 million total downloads and is ranked the second most popular application on Download.com after ICQ.

"Working with America Online will let us globally extend the use of our technologies through its Internet brands," said Nullsoft founder and president Justin Frankel.

"In addition, having access to America Online's tremendous resources and infrastructure will let focus our efforts on what's really important: making cool software."

Spinner will remain based in San Francisco, Calif., where Nullsoft plans to move its operations as the two teams merge.

Nullsoft is currently defending its MP3 decoder from a lawsuit filed by Playmedia, which alleges that Nullsoft illegally derived its Nitrate MP3 decoding engine from Playmedia's Audio MPEG Player (AMP) technology.