Roxio said Monday that it will sell its consumer software division for $80 million and focus wholly on its Napster digital music business in the future.
The company plans to officially change its name to Napster, taking the brand of the onetime file-swapping revolutionary that it purchased nearly two years ago. For the last nine months it has operated Napster as a paid digital music download and subscription service, competing in part with Apple Computer’s iTunes.
The decision marks a dramatic and relatively rapid change in the company’s identity and strategy. Once a leading company aimed at helping consumers burn CDs, it has seen that business slowly decline as other software programs such as iTunes have added their own automatic disc-burning capacity.
The digital music business is expected to grow substantially, however. Although far behind iTunes in terms of revenue, the Napster division is now making about $7.9 million a quarter, and is on track to reach $30 million to $40 million for its fiscal year.
“With the news today, we are on a path to become a very well-funded pure play in one of the hottest sectors in the consumer technology market,” Napster CEO Chris Gorog said.
The deal, in which Roxio will sell its consumer software business to Sonic Solutions, will likely leave the slimmed-down company with close to $130 million in cash to help fund the marketing and development of the digital music business.
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