Updated: Motorola To Acquire Asian Digital Music Service Soundbuzz

Motorola (NYSE: MOT) has announced that it will acquire online and mobile music distribution company Soundbuzz. The details of the deal have not been disclosed, but Motorola expects to close the deal in the first quarter of 2008. Motorola sees Soundbuzz as a means of expanding it’s MOTOMUSIC brand into India, South-East Asia, Australia and New Zealand. India and Australia are Soundbuzz’ largest markets. In terms of content, the company claims to have over 750,000 tracks for download, and partnerships with Sony (NYSE: SNE) BMG, EMI, Warner Music International and Universal Music Group, as well as over 45 independent record labels. Interestingly, they also have plans to launch a DRM free store. Soundbuzz was started in 1999 by Sudhanshu Sarronwala, formerly Managing Director and Senior Vice President of MTV Asia, heading the company’s South-East Asia operations.

This acquisition is in consonance with Motorola’s announced plans to launch MotoMusic in India, and is also interesting in the light of Nokia (NYSE: NOK) preparing for the launch of i’s content brand OVI in India – with tie-ups for music content, apart from astrology and Cricket. Motorola has reduced time-to-market with this acquisition. As per the release, the company’s system includes “subscriber management, content management, payment, client software and media delivery technologies,” and they will “continue to provide ‘white-label’ services to carrier customers.”

Update: I just spoke to Sudhanshu Sarronwala, CEO of Soundbuzz, who refused to talk about anything financial – whether about valuation, the terms of the deal, Soundbuzz revenues or who from Motorola will be joining Soundbuzz’ board. For Soundbuzz, the attraction was of working with a device manufacturer, and “the strategic view was common, in terms of leveraging mobile music”. He did say that Motorola has acquired 100 percent stake in Soundbuzz, and fundamentally, the company will continue to provide its services with the current team. The Soundbuzz team will be expanded as the business grows. The addition to business will be on the Motorola side: Motorola has been running MotoMusic in China, and have been keen on expanding the brand to other regions, so that will get added to Soundbuzz’ folio. On whether Soundbuzz is looking at launches in Europe or the US, he says that Soundbuzz will continue to focus on the Asia Pacific region, and expansion into other markets is for Motorola to answer. Soundbuzz’s business is distinctly mobile centric, with 70 percent of its business mobile, and 30 percent Internet.