This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Napster Wakes Up

Napster has said that a growing array of music-enabled cell phones should help grow the business. Analysts also pointed to its partnership with NTT DoCoMo (DCM - Get Report), Japan's largest wireless carrier, which will sell handsets compatible with Napster To Go.

Also in the pool of potential pursuers are Internet companies. Yahoo! (YHOO) purchased Musicmatch in 2004, but Google (GOOG) doesn't have a music service and could be a contender, Munster says. Amazon.com (AMZN) recently debuted its movie download service , and music would make a logical addition.

The third, long-shot category could be broadband providers, Munster says, as companies "try and entice people to stick with their broadband service providers. I think you could see a music service integrated with those offerings."

Don't discount a certain hardware manufacturer, says another Napster watcher.

"The one that makes the most sense to me is SanDisk (SNDK)," says Darren Aftahi, vice president, equity research at ThinkEquity Partners, which makes a market in Napster but does not own shares or do banking.

"They have pretty good traction in the MP3 market -- that gives Napster a distribution platform," he says.

On Monday, SanDisk lent its support to RealNetworks instead. Real said its Rhapsody service will be integrated into SanDisk Sansa e200 MP3 players.

Though it lags far behind Apple, SanDisk sells the second-most-popular MP3 player.

Aftahi believes that Napster's subscription model will gain support as the capability on mobile phones grows. "You need to have the networks in place to deliver that data over the air, and you need to have the handsets to support it," he says.

With other digital media plays being picked off one by one, investors might want to get in on the company ahead of a sale.

"I think it's undervalued," Munster says. "Wall Street has basically walked away from Napster as a viable company, and I think they're missing the value of the Napster brand."

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $125.80 -2.25%
DCM $17.60 -1.12%
NOK $6.38 -0.76%
NWS $15.92 -0.93%
RNWK $6.39 0.16%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs