Saturday, April 5, 2008

MySpace will launch MySpace Music

MySpace is a very popular social networking site with the tens of active million users making it a very important portal overall. One of the popular features that keeps a lot of users on the site is the music feature. This has always annoyed the music labels, and finally they are getting a solution that is making them happy.

The social networking heavyweight announced Thursday that it has deals with Sony/BMG, Universal and Warner music labels to transform its current music offerings into a full-fledged jukebox of streaming and downloadable music. As the new features are rolled out in the coming months, MySpace Music will evolve into "what we think is going to be a transformative music experience for the user," says MySpace cofounder Chris DeWolfe.
Under the new agreement, De Wolfe says that labels plan to offer artists' entire catalogs for free listening and for-pay downloads. "We are considering a subscription model as well if it makes sense," he says. In an earlier interview, DeWolfe did not announce a pricing scheme nor would he say whether downloads would be MP3s or another format, or whether they would contain digital rights management. "Not all the music companies have embraced full non-DRM downloads," he said. "I personally think that is where the market is going but that will be a decision all the music companies will have to make."

From initial trends, it seems that the deal is something that record labels are happy with, and that will translate into terms that a lot of users may not end up liking. One has to wait and see how this will turn out.

Microsoft not going to increase offer for Yahoo

A typical takeover effort typically starts with a negotiating bid, that is normally not exceptional, and then over a period of time, there is pressure for the bid to go up. What typically happens at this time is that more contenders will jump into the fray, putting pressure for increasing the bid; also, what may happen is that the board of the company being acquired pushes for a higher bid as a condition of accepting the bid; and in some cases, influential shareholders holding significant shares may agree to tender shares if the price being paid is increased.
However, the saga of Microsoft's takeover of Yahoo is not following any of these trends. The refusal of Yahoo's management to accept this offer was not a surprise, but everything else is. The value of Yahoo's bid is overall so high, that no white knight could be found who would be willing to fork out that kind of money. Not much of relief to Yahoo in this regard. Microsoft has also steadily refused to increase its bid so far, maybe in the expectation that eventually the pressure of investors and employee morale decrease will force Yahoo to accept, and there are signs that this may be happening:

Microsoft Corp is evaluating its bid for Yahoo Inc because the Internet company may have lost value since Microsoft made its offer, people familiar with the matter said on Friday. The news, first reported by Reuters, sent Yahoo shares down more than 5 percent in extended trade.
After weeks of silence, recent comments from various sources to journalists suggest the software maker is hardening its stance and pushing Yahoo for action. The sources told Reuters that Yahoo has lost key personnel, making the company less valuable, while generous severance packages it handed out to executives and full-time employees in the case of a takeover have made it more expensive.

Of course, if Yahoo starts to lose key personnel and the industry sees much lower growth, then any hint of Microsoft lowering its bid may have a very strong impact on Yahoo. To some extent, analysts have made this deal a done deal in the end, that is, no matter the discussions, the deal will be made (in order to give the 2 companies a fighting chance against Google).