Napster back from the brink
In a surprising reversal Bertelsmann agree to acquire assets and provide funds for the music swapping service.
German media giant Bertelsmann has agreed to pay US$8 million to take over the troubled music-swapping site Napster, and will bring back executives who quit just days earlier.
Under the terms of the agreement, Napster will move forward with Konrad Hilbers as chief executive officer and Shawn Fanning as chief technology officer. The pair, along with other executives, quit last week after the board reportedly rejected a US$30million buyout offer by Bertelsmann. At the time, Napster appeared to be close to bankruptcy.
"We are very pleased to have reached an agreement with Napster’s Board of Directors," says Joel Klein, chairman/CEO of Bertelsmann. "We’re happy to see Napster move forward with Konrad Hilbers at the helm. We are very committed to providing artists the best possible distribution opportunities for their work, and to providing consumers more choice and control.
“Creating new ways of doing business is never easy, but Napster will be at the forefront of finding business models that respect copyright, reward artists, and deliver entertainment value to consumers. Peer to peer is a transforming technology and we’re proud to have Shawn Fanning continue to work on its development," he concludes.
Returning CEO, Konrad Hilbers, is also optimistic about the new deal. "While this has been a very unusual week,” he says, “I’m pleased that I and my colleagues can move forward and give our full attention to Napster’s future." In addition to resuming his duties as CEO, Hilbers will also chair Napster’s board of directors.
"Bertelsmann understood our vision when they first invested in us. They still believe in that vision," says Shawn Fanning. "I’m ready to work with the many talented people at Napster to complete the new service and get it off the ground."
Other executives who will rejoin the management team include Jonathan Schwartz, general counsel, Claire Hough, VP of engineering, David Phillips, VP of Napster services and product management and Oliver Schusser, VP of marketing. Continuing with the company will be Manus Cooney, VP of corporate and policy development and Lyn Jensen, CFO.
The once wildly popular Internet site - shut down by court order - has been straining under a weight of debt, boardroom bickering, executive defections and pressures from record companies.