Napster faces music as bankruptcy looms

The assets of the Napster file-swapping service are expected to wind up in the hands of benefactor Bertelsmann later today, as the near-defunct start-up's bankruptcy hearings close.

Napster agreed to sell itself to Bertelsmann for just $9m, barring the appearance of any other bidders in a bankruptcy court auction. Despite an attempt by Napster's creditors to raise interest in a competing bid, no rivals to Bertelsmann emerged.

The German media giant had already extended Napster close to $85m in loans and contended that any rival bidders would have to take on that liability to exceed its bid.

It's not clear what role, if any, Napster will have inside Bertelsmann, however. The company had been the darling of former Bertelsmann chief executive Thomas Middlelhoff, who left the company in late July.

The new management, drawn from Bertelsmann's more traditional businesses, has not indicated what its plans for the once-popular file-swapping service might be.

Although it never officially launched, Napster developed technology for a file-trading service that would let people trade songs authorised by record labels for online distribution. Originally the service was designed to compete with Pressplay and MusicNet, the subscription services owned by the major music labels, but the labels never gave Napster the green light to launch.

John Borland writes for News.com