AOL's "Sticky App" Crusade Continues
streaming media and Internet music wars continued to heat
up this week.
Brace yourself Yahoo (YHOO),
America Online (AOL) has joined the party.
Dulles, Va., online services giant entered the digital
music fray in a
big way Tuesday by acquiring online
music service Spinner.com and Nullsoft,
the popular WinAmp MP3 player. The total deal was
million, and sources close to it estimate
the purchase price of Spinner at
million. Nullsoft, founded by 20-year-old netrepreneur
Frankel, is believed to have fetched $80 million. Not bad
for what started
out as Frankel's part-time hobby.
Gotta love the Net.
I'm not particularly
surprised that AOL decided to snatch up Spinner.
Frankly, I expected someone like AOL to make the move
sooner. Back in the
March 28 Cyberstock, I suggested
that "perhaps AOL's master marketer Bob
will decide to snatch up Spinner.com and package
Spinner Plus in
downloads with ICQ and AOL's Instant
Messenger." I also wondered aloud if
Yahoo would care to
double-dip in the streaming media/online music space.
AOL obviously ended up the proud parent, but Yahoo
did announce an
agreement with Spinner last month
to provide audio programming and
Yahoo Radio. You can rest assured, however, that
Spinner now becoming a part of the AOL family, the Yahoo
is history. Sorry Yahoo, AOL beat you to
The media was also buzzing with
discussion this week that AOL's purchases
suggest it is
getting back into the business of owning its own content.
Wrong. Try Again. I believe the two deals were largely
done for AOL to
acquire additional sticky desktop
applications and millions of captive
services directly compliment AOL's existing AOL
Messenger and ICQ instant messaging applications. I expect
significant cross promotion in the coming
months between the growing stable
of sticky aps that
AOL has acquired. Just as important, both of
deals give AOL leading gateways between the user and
the delivery of
digital music. Once encryption
standards are set, I believe AOL has the
skim substantial downloadable music revenue from both
WinAmp player and Spinner Plus player.
these purchases give AOL two ideal broadband
applications to serve
as promotional tools for its AOL Plus
broadband service. I continue to
maintain that the major
cable players will eventually come to the table
do business with AOL. They can't ignore AOL's
industry leading 19 million
members if they hope to
achieve mass-market penetration. AOL's acquisition
broadband applications like Spinner and WinAmp fit nicely
recent high-speed satellite and DSL deals,
as well as its cable plans.
When the cable
companies finally wake up to reality, AOL will have
sticky broadband applications to help back up its
muscle. I still believe AOL should
cement its position in the streaming
media space by
snagging streaming media leader RealNetworks (RNWK).
Although, RealNetworks Chief Executive Rob Glaser seems
convinced that he
can fight and win the streaming media
battle with Microsoft by himself. We
Some of you are arguing that some franchise
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deemed to be no legal or without merit, shall be null
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