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October 04, 2012

Microsoft May Have Plans to Buy Out Music Startup Rdio

By Steve Anderson, Contributing TMCnet Writer

Some new reports making the rounds this morning suggest an interesting new move for Microsoft may be in the works, one that makes a surprising amount of sense. Though sources are keeping quiet on both fronts, and providing little in the way of substantiation, the early word suggests Microsoft may be looking to buy the music startup firm, Rdio.

The talks are almost certainly happening right now, and though nothing may come of them, it's one of those developments that actually makes quite a bit of sense. Microsoft, according to CEO Steve Ballmer (News - Alert), has been trying to get away from just being a software company and becoming more of what they call a "devices and services company."

Given that Microsoft, when asked by The Next Web about the talks, responded with a statement that detailed their excitement for the release of Xbox Music – which, oddly enough, would not be limited to the Xbox line of hardware but would make appearances on the Windows Phone (News - Alert) 8 platform as well as Windows 8 devices according to the statement – they might very well be looking for a way to put some extra punch in their music offerings.

Given that Rdio already has some experience in terms of international expansion, it makes them an attractive target for a big name like Microsoft, who already has a platform in the form of not only Windows device users, but also Xbox 360 gamers and Windows Phone users.

Additionally, Rdio's offering a very attractive catalog of songs available, with over 18 million titles, most of which were acquired over the last two years. They even pay the artists directly, $10 for every new subscriber. But Rdio has been facing challenges, especially with Facebook (News - Alert)-backed competitor, Spotify.

Rdio could use a champion, a major platform on which to operate and show off its impressive catalog, just like Spotify (News - Alert) has.

Given that Rdio already has Microsoft connections – the founders of Rdio were the same pair, Janus Friis and Niklas Zennstrom, who started Skype (News - Alert), which Microsoft famously bought in 2011 – it makes the idea of bringing Rdio into the Microsoft fold take on a new and almost frightening amount of sense.

Microsoft could use a service like Rdio to beef up its music offerings and move them that much closer to being a full-service entertainment option. Rdio could stand the influx of support that Microsoft users who aren't already Rdio users would afford. It looks like a win-win for all concerned, so this particular rumor is likely one that will pan out at some point in the future. This is still, of course, very early-stage stuff, so projecting a launch date is likely an exercise in futility.

But it's hard to turn away completely from a good idea, and an Rdio / Microsoft joint effort looks like just that.

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Edited by Braden Becker
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