Nokia, the world's largest handset maker, has agreed to acquire Loudeye, a provider of digital media distribution services, for $60 million, the two companies announced Tuesday.
The acquisition marks a deeper thrust by Nokia to offer not only digital devices but also applications and a content delivery service.
Loudeye, with headquarters in Seattle, Washington, focuses on digital media delivery platforms for businesses wanting to offer songs and content online. The company also secures the rights to the content from record labels.
Loudeye counts 1.6 million tracks in its catalog, a figure Nokia cited as "substantial." Loudeye said it runs 60 download services in 20 countries in Europe and South Africa, Australia and New Zealand. Major clients include MTV Networks, a division of Viacom International.
Loudeye also works with ISPs (Internet service providers) and mobile operators on value-added services and consumer electronic manufacturers on media services to complement their hardware, it said.
By 2007, Nokia said it will offer a "comprehensive" music service but did not offer more details. The company said it sold more than 15 million devices capable of playing digital music files in its second quarter.
Loudeye shareholders will receive $4.50 per share of common stock. The acquisition is expected to be completed by the end of the year, the companies said.
For its first quarter ending March 31, Loudeye reported a net loss of $4.6 million on revenue of $8.4 million.
Loudeye will report financial results for its second quarter on Wednesday.