Tullman to join board of directors

Online music service EMusic.com said Tuesday it has acquired Tunes.com for $135 million in stock in a deal that adds RollingStone.com and DownBeatJazz.com to its portfolio, a move that may signal a start of consolidation among online music players.

The Redwood City, Calif.-based company sells downloadable MP3 music files from artists including Bush, Beck, They Might Be Giants, Blink-182, the Goo Goo Dolls and David Crosby to its 1.3 million-plus monthly visitors.

The deal is expected to close next year and is subject to customary terms and conditions.

Getting down online

“Since its inception, EMusic.com has been focused on the emerging market for downloadable music,” said prexy-CEO Gene Hoffman. “This acquisition is a logical and aggressive expansion of our business model which significantly extends our reach and overall visibility. This is a unique opportunity to accelerate the adoption of downloadable music.”

Tunes.com chairman-CEO Howard A. Tullman will become a member of EMusic.com’s board of directors upon completion of the acquisition.

Once the deal closes, EMusic will integrate Tunes’ Web sites and services into its own flagship service — adding RollingStone and DownBeatJazz’s news, reviews and artist descriptions — to become one of the leading sites for downloadable music and music information on the Internet.

In addition to creating one of the largest downloadable music catalogs available for purchase, the new combined company also will serve up more than 35 million page viewings to some 1.5 million unique visitors per month.

By song or by album

EMusic alone offers over 50,000 tracks for purchase — individual tracks for 99¢ each or entire downloadable albums for $8.99.

Chicago-based Tunes has 1.1 million registered users and reported revenues of $1.3 million for the quarter ended Sept. 30.

“We believe that online music fans purchase music in two ways: They either go directly to a retail site with the intent to buy, or they make a purchase decision after reading an article or hearing a track through Internet radio,” Hoffman said. “This acquisition allows us to integrate these channels in a seamless fashion.”

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