Apple Computer Inc. may have some competition if it plans to purchase Universal Music Group from Vivendi Universal. Microsoft Corp. is apparently interested in buying the music giant, but its interest at this point is said to be at the level of "poking around, kicking the tires," according to the New York Post.

Some in the music industry view a Microsoft or Apple bid to become involved with Universal Music as an affirmation that digital downloading can be a profitable business. Organizations like the Recording Industry Association of America (news - web sites) (RIAA) have blamed digital pirates for the steady decline in CD sales over the last couple of years. Among its victories to curb Internet pirates, the RIAA was instrumental in closing down the Napster file sharing service.

"It's wonderful when someone like Steve Jobs -- who is generally viewed as a visionary and a futurist -- has a genuine interest in music as an investment at a time when everyone is running scared from the music business," one music industry veteran told the NY Post.

Meanwhile, the New York Times is reporting that a deal between Apple and Vivendi for Universal is unlikely. "The talks between Apple and Vivendi covered the concept of buying as much as a third of the music unit, according to people close to the discussions. But the talks appear to have been just exploratory discussions that did not go far."

News source: Yahoo News

First reported yesterday, Apple is said to be in talks with Vivendi and is expected to make a $5-$6 billion bid for the music business by the end of April. Analysts did not respond positively to the news yesterday and Apple's share price dropped on the news.


"While it can be argued that Apple could make some incremental revenue from the online sale of music, the company would not need to own a music company in order to do so," Merrill Lynch analyst Michael Hillmeyer wrote in a note to clients. "In fact, there do not appear to be any synergies between a music company and a PC company, even one as innovative as Apple."


Vivendi Universal is shopping its properties to raise up to $7 billion this year. Billionaire Marvin Davis, who has made a $15 billion bid for Vivendi Universal Entertainment, would not pursue his bid if Vivendi sold its music division or pulled it off the market, sources confirmed on Friday.


Shares of Apple Computer Inc. fell more than 8 percent on Friday after investors learned of talks the company could be in to acquire Universal Music Group from Vivendi Universal. Apple's stock closed at $13.20, down $1.17 or 8.14 percent.


There are 8 additional comments
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Quote this comment Reply to this comment #1 Posted by Jerichohol on 14 Apr 2003 - 14:30
welcome to the microsoft world
(1 reply) Quote this comment Reply to this comment #2 Posted by me101 on 14 Apr 2003 - 15:49
Oh wonderful... Microsoft buys Vivendi, lock everone into WMP9 DRM... or Apple buys Vivendi, you have to use a Mac to use their proposed music download service.... Which one would you pick
Quote this comment #2.1 Posted by kirk26 on 14 Apr 2003 - 20:48
apple of course
Quote this comment Reply to this comment #3 Posted by me101 on 14 Apr 2003 - 15:52
Oh yea, did anyone notice that Apple is due to release an "upgrade" to the iPod line of portable music players sometime in the next month or so... Rumors "central" has it that they will ditch the 5gb and 10gb versions, and have a new 15gb and 30gb models offered which will add four new buttons under the screen replacing some of the jog-shuttle controls, and also include a charging base with the new units... But this is only a "rumor"...
(1 reply) Quote this comment Reply to this comment #4 Posted by corrosive23 on 14 Apr 2003 - 16:04
Someone needs to buy universal, they are doing horrible. Hell Universal Studios is giving away year long passes for the price of a one day ticket. Now that is pathetic.
Quote this comment #4.1 Posted by dp123 on 14 Apr 2003 - 21:28
Someone needs to learn the difference between UMG and Universal Studios.
Quote this comment Reply to this comment #5 Posted by seeingsam on 14 Apr 2003 - 21:48
Dont know about Apple but Microsoft has enough resources to buy and do what the he** they want with it, if it fails they'll lose only a few billion no big deal.
Quote this comment Reply to this comment #6 Posted by PacificAk on 15 Apr 2003 - 04:17
if apple does buy even a third of UM which comes to around $1.5b, won't it creat a large hole in apple's pocket... & when u invest that much i dont think u can think of "incremental revenue".. that would really pi??off the investors..!!! .. no wonder they r not too serious..
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