September 16, 2008 in City

Best Buy purchasing Napster

 

Napster Inc., the online music community that rose from a dorm room project to become the scourge of the global recording industry, is being purchased by Best Buy Inc. for nearly $127 million as the electronics retailer tries to boost its digital music business.

The $2.65 per share all-cash deal announced Monday is nearly double the music network’s Friday closing price but a small sum to pay for Best Buy, which gets access to Napster’s 700,000 subscribers who pay a monthly fee to access digital music catalogs.

In a statement, Best Buy valued the deal at $121 million, and said the difference was due to unvested employee stock awards at Napster.

SAN FRANCISCO

Job cuts coming for HP, EDS

Hewlett-Packard Co. said Monday it plans to cut 24,600 jobs over the next three years, about 7.5 percent of its work force, as it combines operations with Electronic Data Systems Corp., the technology-services company it recently acquired.

Most of the cuts will come from within EDS’ ranks, and nearly half will hit jobs in the U.S., HP said Monday after the markets closed.

The announcement marks the first time HP had put a number on how many employees of the combined company would lose their jobs. Before the acquisition, HP had 178,000 workers and EDS had 142,000.

HP was expected to reveal more details about the integration at a meeting with financial analysts in San Francisco later Monday.

CHICAGO

United second bag fee now $50

United Airlines on Monday doubled its fee for a second checked bag to $50, citing volatile fuel prices.

United, a unit of UAL Corp., said the $50 one-way fee would apply for tickets bought beginning today for travel beginning Nov. 10. in the U.S. or to or from Canada, Puerto Rico and the U.S. Virgin Islands.

Travelers in first or business classes, “Premier” frequent fliers, and active-duty military personnel traveling on orders will be exempt. United estimated the $50 fee would apply to about one out of seven customers.

Fuel prices have declined in recent weeks as oil prices have fallen, from a high of $147 a barrel to below $96 a barrel on Monday. But United said fuel prices remain more than 50 percent higher than last year.

From wire reports

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