Napster, which started its life as an illegal MP3 sharing service created by a college student in Visual Basic has evolved into a $100 million plus corporation. Despite the vast increase in revenue, the company is still losing money according to Napster's financials.
Napster's subscription model, which differs from Apple iTunes pay per song model, still revolves around the fact that the profit margins are incredibly slim. As more competitors enter the market, Napster is now looking for a partner or to sell out entirely according to an article on Ars Technica.
Napster's subscriber base is roughly half a million users, far smaller than Rhapsody and iTunes is increasing its share as more users get iPods and compatible devices (the recent release of Microsoft Zune and Urge make things even murkier).
Will Napster get bought out? Some feel that the Napster brand is still strong enough to be enticing to a major player looking to enter the market quickly.
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