Investors treated Roxio
Roxio now expects revenues of $5.5 million for its Napster unit, and $26 million at its software division, compared to revenues of $3.6 million and $15.2 million, respectively, for the third quarter.
However, in that quarter, Roxio widened its third-quarter loss per share because it spent more money for its online division, which includes Napster. Once a revolutionary force in digital music, perhaps best known for turning many regular computer users into musical bandits, Napster returned (on the right side of the law) last October. (For a refresher course in what went down, check out Bill Mann's report on the return of Napster.)
The online music business is without a doubt exciting; for several years, people have shown a willingness to ditch CDs for digital downloads. According to Jupiter Research, what is currently an $80 million market could soar to $1.6 billion by 2008.
That's why many large and varied companies vie for a piece of the downloading action. The most wildly successful entrant so far has, of course, has been Apple
Much has been said here at the Fool about the future of digital music. But with so many changing and competitive forces at work, a bet on Roxio's Napster as a major contender remains risky.
Are you an iTunes junkie? Check out iTunes Music Store Playlists here at Fool.com.
Alyce Lomax does not own shares of any of the companies mentioned. She welcomes your feedback.