Best Buy recently announced that it would be purchasing Napster for $121 million dollars. It has some speculating whether it has its eyes set on knocking out the music giant, iTunes. Apple’s iTunes said bye bye to Best Buy when its spot as the #2 music retailer in the USA. iTunes wasn’t finished they came back a few months later to knock Wal-Mart out of the top position. Currently Apple’s iTunes is the #1 music retailer in the United States.

Will this acquisition affect the budding relationship between Apple and Best Buy? Susan Busch doesn’t think so. Susan Busch, Best Buy Corporate PR Director, recently spoke with Cult of the Mac she stated ““Our relationship with Apple is strong and will continue to be so,” BestBuy recently started selling the extremely popular iPhone in the USA which gives iPhone enthusiast another option on purchasing this extremely popular phone. Although it sounds good it’s hard to believe that it won’t be competing with Apple’s iTunes after all iTunes and Napster both sell digital media.

With the purchase of Napster Best Buy will be gaining 700,000 subscribers. Best Buy already owns part of Napster. It has been on board since December 2004. In a joint marketing agreement, Best Buy paid $10 million for a stake in the company. It will be interesting to see what affect Best Buy’s new acquisition has, if any, on iTunes. This past May Napster revamped its service offering a selection of over 6 million DRM-free songs. Napster took a shot at iTunes when it stated that, “the largest major label MP3 catalog in the industry, but also the largest library of independent music available anywhere.”

Napster was created by college student, Shawn Fanning, in June 1999. It was an online music file sharing service where users could log on download music files for free. It became an extremely popular service at its highest point in February 2001 it boasted over 26.4 million subscribers. However, Napster faced legal issues when music stars such as Metallica and Modonna had some of their songs leaked onto Napster even before they were officially released. Napster faced a few lawsuits which it lost and eventually had to declare bankruptcy. Napster was bought by a few companies since its bankruptcy with Best Buy being the latest to acquire the company.

Best Buy isn’t looking to make any major staffing changes under the terms of the contract Chris Gorog, Napster CEO, along with the managers will remain with the company.

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