5 Reasons Google Should Buy Warner Music Group for $1 Billion

Andrew Wise [ http://wisestartupblog.com/author/andrew%20wise/ ]

November 27, 2007

EMI was bought by Terra Firma for $4.7 Billion a couple of months ago, and now TF is struggling with their decision to buy this failing giant, especially at that high price point.

Warner Music Group is now trading at $7 per share, down $20 from its $26 point last year, and is valued at only $1 billion.

Here are 5 reasons Google should buy WMG:

1. Warner is the last record label to go forward with DRM-free

Google would make the obvious switch to bring WMG into the DRM-free world, and increase sales immediately. Also, they could reap the licensing deals with power players iMeem, iTunes, Amazon, Grooveshark, etc.

2. Google could easily promote WMG products in its own adwords product

Whenever a customer searches for Britney Spears, you could show an advertisement to your Google-owned music store where users could easily purchase the content.

3. Google can reap the rewards of all the positive publicity of removing the RIAA lawsuits

If there is a huge player like Google in the mix, it can have leverage over the RIAA and stop these ridiculous lawsuits. Also, by embracing new technologies that offer legal alternatives to illegal networks, we can see a decline in piracy overall.

4. Google can use the music catalog as a backbone for their new Android OS

Interconnectivity is the game, and if Google has a cheap source for music, they can build in rich music applications to their Mobile OS and respective search services.

5. Google could offer free music products by offering up advertising dollars to subsidize music

Similar to what Grooveshark is doing with subsidizing music, Google could use advertisers to pay for the price of music. If Google offered free music, backed by their advertising catalog, they would be unstoppable and easily kill SpiralFrog’s pathetic DRM-attempt at free music.