Google squashes Napster buy rumour

Google has emphatically denied the suggestion that it is looking to buy music-pirate-turned-legit-song-shop Napster.

The rumour first started circulating following a report in the New York Post which said Google was readying its chequebook for a takeover, or preparing to announce a union between the two.

The report came hot on the heels of earlier suggestions, denied by Napster, that the company was preparing management layoffs and was facing up to possible liquidation, after struggling to steal market share from the iTunes behemoth.

A Google spokeswoman said talks of a possible combination between the search giant and Napster were "a complete rumour".

She said: "We have no plans to acquire Napster, nor do we have plans to develop a music store at this time."

Whispers of a tie-up initially sent Napster stock skywards. Since Google first made it clear it wasn't interested in a takeover, however, Napster's share price has started to dip, although it currently stands around 25 per cent up on yesterday's closing price.

Google's stock, meanwhile, fell initially following news of a profits miss, although its stock price has since returned to its approximate value before the announcement.