Microsoft In Process of Acquiring Mobile Music Service Musiwave; Price Around $50 Million

Microsoft (NSDQ: MSFT) says it is in exclusive talks to purchase Musiwave, a provider of mobile music services to wireless operators and entertainment companies. Paris-based Musiwave was acquired by mobile browsing and applications firm Openwave (NSDQ: OPWV) in September ’05 for $121 million. Recently, Openwave indicated that it was looking to sell the unit, after it took a $54.7 million writeoff associated with the acquisition. In a statement, Microsoft says Musiwave has valuable relationships with music labels, device makers and wireless operators, and that the acquisition would complement existing Microsoft offerings, including Windows Mobile and the Zune. For OpenWave, the deal will mean a cash boost and a leaner operation, both of which should help the struggling firm. Financial terms have not been disclosed. Release.

Rafat adds: This would be the first such acquisition in the mobile music space by a big portal…even then this is on the infrastructure/backend side, not the front-end consumer side. We have found out from sources that the price is around $50 million, which is close to 1.8 times its current yearly sales revenues. Also, Musiwave COO Guillaume Decugis is not joining Microsoft with this acquisition, we have learned.

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