Bertelsmann eyeing up Liquid Audio?

Digital music biz to become merger central in any case

Is Bertelsmann out to acquire Liquid Audio? That was the key rumour doing the rounds at the Webnoize 2000 conference yesterday.

The German media giant, whose Bertelsmann Music Group subsidiary is one of the world's 'big five' recording companies, is already known to be keen on buying fellow major label EMI - a Liquid Audio partner, incidentally - and wants to take a majority stake in controversial music sharing software company Napster.

In the circumstances, a bid of Liquid Audio, one of the digital music market's pioneers, isn't entirely surprising. Liquid Audio's technology wraps rights management and copy protection around the MP3 audio format, making it an ideal partner to provide the technology Napster needs to go legitimate.

And since Bertelsmann, under the guise of its e-commerce group, is driving Napster's attempt to get on the side of the music industry, that has to put Liquid Audio on the German company's radar screen.

Liquid Audio CEO Gerry Kearby wouldn't comment on the rumour, but he did tell Reuters that "everybody is talking to everybody", signalling upcoming mergers between the digital music business' smaller players, perhaps inevitable now the majors are starting to take the market seriously. He also pointed out that his company is not seeking a sale - but that's clearly not the same thing as being targeted for acquisition. ®

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