What are you waiting for, Google
Nothing materialized, of course. Now Google has to belly up to the bar before it blows the perfect opportunity to matter in music. It's currently the bronze medalist in video, a booming niche that nonetheless hasn't been as successfully monetized as the digital distribution of tunes. Scooping up Napster would make Google an overnight presence to reckon with.
The day the music cried
We're not living in a perfect world. Napster, in its present form, is begging for a sugar daddy. The company is cash-rich, but it's also burning through its greenbacks. That adds a level of urgency to get Napster up to the altar before its dowry runs dry.
Napster's balance sheet is blessed with $2.37 a share in greenery at the moment. That means that it would cost a company only about $3 a share to swallow Napster at a reasonable $5-a-stub offering price.
That may not seem like a tantalizing buy, once you realize that Napster is a slow bleeder. However, when you put the pieces together, you'll see why Google is a perfect match for Napster, which revolutionized digital music as a bad boy before it was remade as a legal music service.
Napster isn't the top dog. When it comes to music-subscription services, RealNetworks
Napster also boldly rolled out a free ad-supported music-streaming service back in May. At this point, given its heavy AdWords Rolodex, I can't imagine any company doing a better job at making that kind of offering pay off as well as sponsor-giddy Google.
Keeping up with Mr. Softy
If none of those reasons resonates with you, let's explore the tactical incentive. Microsoft
Oh, and if you're naive enough to believe that Google's biggest rival is Yahoo!
By the same token, a music-subscription service is just about the only thing that Apple
The song remains the same
As the ink dries on YouTube's recently brokered revenue-sharing deal with Warner Music Group
The lawsuits should give way to similar revenue-sharing partnerships. Since all of the up-and-coming video-distribution sites will doubtlessly find it tricky to police users' uploads for licensing violations, Google should already be busy at the negotiating table with the record labels. Would it have a little more bargaining power if the industry also saw Google as a source for generating revenue through digital-music distribution? Of course.
The pieces fit, no matter how you approach them. Google has the breadth to instantly transform a desperate Napster into a profitable concern, yet it can buy up the digital music specialist at its equally desperate pricing.
This duet is just waiting to happen. Both companies just need to start singing in the same key for a change.
Digital music is a high-growth industry that's often explored in theRule Breakersnewsletter service. Microsoft is anInside Valuenewsletter service recommendation, while Yahoo! is a recentMotley Fool Stock Advisorselection. Try any of our Foolish newsletters free for 30 days.
Longtime Fool contributor Rick Munarriz isn't a subscriber to any digital music service, even though he does have satellite radio. He does not own shares in any of the companies in this story. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Foolhas a disclosure policy.