Nokia Buys Loudeye

Nokia and Loudeye Corp. announced that they have signed an agreement for Nokia to acquire Loudeye for approximately $60 million. Under the terms of the agreement, Loudeye stockholders will receive $4.50 per share in cash for each share of Loudeye common stock. By acquiring Loudeye, Nokia can offer consumers a comprehensive mobile music experience, including devices, applications and the ability to purchase digital music.

This announcement by Nokia, which will not get even close to the attention that Microsoft’s Zune achieved, is very significant in the mobile music industry. With rumors swirling around an imminent Apple iPhone disclosure, Nokia has snatched up a digital music distribution concern that will enable the manufacturer to create its own multimedia ecosystem. Owning the complete vertical is one of the biggest reasons that Apple’s iPod is such a runaway success. By controling the entire user experience, Apple has created substantial trust and brand loyalty. Mobile phone companies, cellular service providers and digital music distributors have all been at odds on how to distribute profits from the downloading of music which has stymied the implementation and allowed Apple to sell millions of iPods.

The multi-function mobile device will become the preferred medium for enjoying music. With music optimized products like the Nokia N91 and other Nokia devices, Nokia sold more than 15 million music enabled devices in the 2nd quarter. Loudeye operates 60 live services in over 20 countries and multiple languages across Europe and South Africa, Australia and New Zealand. Loudeye aggregates rights and content from all the major labels and hundreds of independents and currently offers licensed catalog and complete media for over 1.6 million tracks.

Tens of millions of Nokia devices have a music player and every Nokia Nseries device incorporates a music player, high memory capacity and an FM radio, as well as support for a wide range of digital music formats including MP3, M4A, AAC and WMA. With the Nokia Nseries, you can quickly and easily find and purchase music over the air and download it to your device from your music store. Or, simply drag and drop your personal music collection from your PC to your Nokia Nseries device or synchronize your recent music purchases with your PC via Bluetooth or USB cable.

The transaction is expected to be completed in the fourth quarter of 2006. Closing of the transaction is subject to satisfaction of a number of conditions, including approval of Loudeye’s stockholders, regulatory approvals, obtaining consents from third parties to the continuation, modification, extension and/or termination of certain specified contracts, and the absence of a material adverse effect in Loudeye’s business or operations, including loss of employees, loss of customers, or failure to maintain a minimum specified cash balance, each as described in the merger agreement.

Author: FutureMusic

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