Sony pays $260M for Gracenote
http://www.indystar.com/apps/pbcs.dll/article?AID=/20080426/BUSINESS10/804260404
In the '80s and '90s, I was a big fan of all things Sony. Walkmans, Handycams, PlayStations. Every gadget on my wish list was a Sony.
That was then. This is now.
And now, it's all about Apple and its iPod, iPhone and iTunes online music store and software.
But lately, I'm beginning to think I should give Sony another look. The Japanese company, down in the dumps after a series of flops, including the MiniDisc, Memory Stick and Sony CONNECT music software, is reshaping itself as a contender.
Sony has secured two big victories in the last few months:
First, it conquered a lengthy next-generation DVD war, no doubt smirking at the bruised backers of HD-DVD in the process. Sony's Blu-ray format is now the standard.
Then, this week, the company agreed to buy Gracenote, a leading provider of music-recognition services on computers and of song lyrics over the Web.
Hoosier entrepreneur Scott Jones co-founded the California company more than a decade ago. He says Gracenote's management has been talking with Sony for a while.
It's no wonder.
Gracenote is the unsung hero of the digital world.
Every time you put a CD in your computer and launch a music player, such as Winamp or iTunes, it's Gracenote that identifies the CD with the name of the artist, album and every song.
Without Gracenote, you'd get a CD that appears as an "unknown album" by an "unknown artist" with songs simply labeled as "Track 1," "Track 2" and so on.
Imagine building a digital music collection like that. No way.
But what's really interesting is, with Gracenote, Sony soon will own one of the most important components of Apple's iTunes service and its iPod.
Remember that Apple is the nemesis that snatched Sony's longtime lead in the portable music player market. Exit Walkman. Enter iPod.
It seems like Sony could have a blast messing with Apple if it wanted to. Fun times.
Add that to the encroaching deployment of Blu-ray players in homes and computers, including those made by Apple, and things are looking pretty good for Sony.
Some analysts suggest that the company's victory also will ignite more interest in its PlayStation 3 this holiday shopping season since the video-game consoles come with Blu-ray players.
I'm sure it won't hurt that Nintendo on Friday said it won't drop the price of its popular Wii console. Sony twice has slashed the price of its 20-gigabyte PS3 to boost demand. But the Wii is still kicking the PS3's butt.
It will be interesting to see if Sony really does gain an edge.