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MP3.com Will Buy SeeUthere for $150 Million

Company Town

E-commerce: Music distributor said the purchase will boost its online event-services arm.

December 30, 1999|From Bloomberg News

MP3.com Inc., an online music distributor and promoter, agreed on Wednesday to buy SeeUthere.com for about $150.2 million in stock to build its Internet-based event-management business.

The shares of San Diego-based MP3.com rose $9.75, or nearly 40%, to close at $35 on Nasdaq.

MP3.com will exchange 5.95 million shares for closely held Mountain View, Calif.-based SeeUthere.com, a provider of online ticketing and other event services. The value of the transaction is based on MP3.com's closing price of $25.25 on Tuesday.

MP3.com said the purchase will boost its share of the online ticketing market and allow MP3.com's artists to organize and produce their own events and manage their fan clubs. Online ticketing is seen growing to $3 billion by 2003 from $100 million in 1998, MP3.com said, citing Forrester Research.

"It's making itself the premier site for unsigned bands," said Lise Buyer, an analyst at Credit Suisse First Boston Corp., which managed MP3.com's initial sale of shares to the public in July. "They're saying 'Hey, not only will we help you reach your fans online, but we'll also help you build Web sites and arrange events.' It's a great purchase."

MP3.com allows people to download CD-quality music, often for free, from about 40,000 artists. Its technology competes with record companies by allowing artists to distribute and promote their music online at lower cost and with greater control.

With the SeeUthere.com purchase, MP3.com plans to take the kind of grass-roots strategy it's used in music and apply it to the event-planning industry, which generates about $100 billion in revenue in the U.S. annually, MP3.com Chairman and Chief Executive Michael Robertson said.

The transaction is expected to close in the first quarter. Senior management at SeeUthere.com, owned by privately held TransComputing International Corp., will remain in place.

Before Wednesday, MP3.com's shares had fallen 9.8% since July.

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