Neowin.net

Bill Gates is still a multibillionaire, but not quite as wealthy as he was a year ago.

The co-founder and chairman of Microsoft Corp. remained the richest person in the world as of Aug. 27, according to the annual survey by Forbes Magazine of the 400 wealthiest Americans.

The slowing economy was reflected in the declining worth in the rankings, which were released by Forbes on its Web site Thursday night.

Super investor Warren Buffett moved into second place, followed by the other Microsoft co-founder, Paul Allen. Oracle chief executive Larry Ellison dropped from second to fourth.

Gates' net worth fell to $54 billion this year, down from $63 billion last year, largely on the strength of Microsoft's shares, but the diversity of his portfolio, which includes significant investments beyond Microsoft, kept him in the top spot for the eighth straight year.

After the Sept. 11 terrorist attacks, the magazine recalculated the impact on 50 of the list's more recognizable names since the cutoff date of Aug. 27.

Gates lost another $7.2 billion from Aug. 27 to Sept. 24, leaving his net worth at $46.8 billion. Buffett lost $2.8 billion, dropping his net worth to $30.4 billion, and Allen's net worth fell $4 billion to $24.2 billion.

The total net worth of the group of 50 dropped from $311 billion to $266.5 billion, or more than $44 billion.

News source: CBS MarketWatch
View: Bill Gates - Declared Holdings
View: Forbes Four hundred

That's a risky wager, analysts say.

"I am very skeptical about Napster's long-term revenue potential," said Jupiter Research analyst Aram Sinnreich. "They've got one shot to launch a new service that looks nothing like the old one...If they don't get it right, Napster will be dead in the water."

Napster and Bertelsmann declined to comment on the funding.

Like its major media peers, Bertelsmann is in the midst of a scramble to make sure that it establishes as much control over the digital future of its content as it now has in the physical realm. As one of the biggest publishing distributors in the world, its range of content assets is slightly different than rivals such as Vivendi Universal or AOL Time Warner, but its aims are roughly similar.

Unlike AOL Time Warner, Bertelsmann lacks a potent online distribution arm. The company hopes that a revived Napster service, which will charge people to swap or download music files, will fill that missing piece of its Internet strategy. The service potentially could let consumers trade other types of digital content beyond music files, such as books, music videos or movies.

Although Napster remains a shell of its former self, Bertelsmann executives think the service still has cachet among Net users. The hard part will be convincing them to return with their wallets.

Napster's revenue potential is cloudy even under the best circumstances, given that its brand name has been built on music-swapping services that don't cost a dime.

The company hasn't yet said how much it will charge for its monthly service or what features it will include. Previously, executives have laid out a vision of tiered services, with an entry-level fee of about $4.95 a month and an advanced service offering unlimited downloads for $7.95 to $9.95 a month.

But the landscape has changed somewhat since that time. Napster has cut a considerable number of deals with prominent independent labels in Europe and the United States and appears likely to offer the largest authorised array of popular independent artists of any of the planned subscription services.

Its grasp on major label music is more tenuous, however. It has a tentative deal with MusicNet, which includes Warner Music Group, BMG Entertainment and EMI Recorded Music, to offer those labels' songs once it proves it no longer allows copyright violations. The MusicNet content is expected to be part of a separate tier, with a fee over and above what Napster charges for basic service.

The cost structure for Napster's service is beginning to mount as well. As a part of the deal announced Monday, Napster agreed to pay music publishers a third of whatever it pays for content licenses. The company has not said how much money this is likely to be or what percentage of its overall revenues this might represent.

Analysts say this agreement could make negotiating with record labels, which continue to pursue their lawsuit against Napster, more difficult. Labels have traditionally taken well over two-thirds of the total revenue dedicated to content licenses.

The cost of all of these licensing fees is likely to leave room for only a small margin of profit, analysts say.

Napster Chief Executive Konrad Hilbers said Monday that profits were part of the business plan, however.

"I don't envision any Internet business (settling for) less than a 20 percent margin over the long run," he told reporters. "There's nobody here who's willing to lose money over the long run."