Apple to Buy Roxio?

[jholzner]

Originally posted by pretentious
CBS MarketWatch has added in on this, maybe this rumor has more meat on it than just LoopRumors.

It's a pretty small mention so I thought I'd just paste it here:

Apple buying Roxio:

Apple Computer (AAPL: news, chart, profile) is making its foray into digital music, and the computer maker has more cash on hand than all but a few technology companies. A deal to buy recording software-maker Roxio (ROXI: news, chart, profile) might give the company a jump-start in the fledgling market.

Even though Apple and Roxio both make CD and DVD-burning software, Roxio offers it for the Windows platform, where Apple wants to expand by year's end, says Susan Kevorkian, an analyst with Mountain View, Calif.-based International Data Corp.

Roxio has also made moves to develop its Napster brand recently, and acquired PressPlay, a fee-based online music service. If Apple were to acquire those assets, it would eliminate a competitor, and offer a better Windows-based service -- probably more quickly than it could otherwise.

Unprofitable Roxio has about $2 a share in cash and is trading at a multiple of one times its expected 2004 sales -- which is considered far less than the average software maker. Even if Apple had to pay $220 million for the company, or about a 50-percent premium, it could easily pay for the acquisition in cash.

 

[Cappy]

Two thoughts:

1. For what its worth the Music industry would probably like to see the Napster brand name put to rest and Apple could come out looking like the hero. Some think that the Napster brand name would be valuable but I see the opposite. In the eyes of the consumer I don't think that they're going to follow along with it as being used for what will now be a commercial service rather than the illegal activities it was used for in the past.

2. Why isn't MS pursuing them? They already license some code from them for the cd burning capabilities in XP and could gain a few similar advantages as Apple in eliminating a competitor.

 

[bennetsaysargh]

now witgh that BDS Marketwatch article, I find it to seem more realistic. CBS is a newws station/media whatever you wanna call it, and i doubt they would publish this without checking thier sources.
yay

 

[jettredmont]

Originally posted by bennetsaysargh
now witgh that BDS Marketwatch article, I find it to seem more realistic. CBS is a newws station/media whatever you wanna call it, and i doubt they would publish this without checking thier sources.
yay

Um, yeah, but read that article carefully! The author says he asked analysts about what kinds of deals would make sense and specifically says that he has no reason to believe these are likely to be the "next" big buyouts. Just that these are places where there is an "obvious" synergy between two companies (though I only half-way agree with his sources there).

 

[bennetsaysargh]

sorry about that. i guess i wasn't reading it carefully.

 

[seamuskrat]

Hypothesis

Apple IS making iTunes for windows.
iTunes is basically a simple MP3 player/AAC player that utilizes Quicktime as a core technology. iTMS is a web based system.
So, to make iTunes for Windows Apple has QT technology already optimized and working, they just need a front end inteface and the web portion and they are ready to go.
However one of he neat features of iTunes for Mac is the ability to burn CDs with ease. How could Apple release an iTunes for Windows and keep quality control and still support a million different PC burning units?
Possible answer 1:
Don't burn. Creat a disk image of wav files, AIFF files, MP3 files, etc. and let theuser deal with burning themselves. Not elegant, but if the disk does not burn, its not really Apple's fault.
Solution 2) Buy Roxio and its Easy CD Creator software and incorporate it into itunes for Windows. Makes a lot of sense.
PLUS, Roxio owns the remaining soul of Napster, which has got to have some value now that Apple is in the music biz.

Roxio's market value is well within the range Apple could swallow, and they have products that are very successful on the Mac and PC. And they could use the PC side technology. So it just could be a good decision.