Listen.com Sold To Real Networks

Real Networks bought former rival Listen.com for a mere $36 million Tuesday after making a small investment earlier this year.

Real, which is a minority investor in label-based MusicNet, has been trying to spice up its RealOne SuperPass service, but didn't upgrade to the latest version of MusicNet's technology.

"This gives [Real's CEO] Rob Glaser the ability to experiment without having to ask the other 60 percent of MusicNet's investors," said P.J. McNealy, research director at Gartner G2.

Listen.com attracted a cadre of investors when it first launched on the scene. BMG Entertainment, EMI Recorded Music, Universal Music, Warner and Sony, along with Madonna and her Maverick Records business partners, Guy Oseary and Ronnie Dashev, took stakes in the company - making it the first Internet music site to attract financial support from all the major labels.

Originally imagined as a guide for online music, Listen once had extensive reviews and a staff of hundreds that kept the site flooded with fresh material.

But Listen hit a sour note two years ago, when online advertising dried up, and the company began to have mass layoffs.

Rhapsody, its online music service, which allows burning and streaming of music to its subscribers, was its second business plan - one the company had hoped to revitalize its bottom line.

While subscriber numbers were never enough to save Listen.com, Rhapsody won kudos from critics who bashed label-backed online music sites including pressplay and MusicNet.

"The opportunity for us to add Listen.com's Rhapsody, the best music subscription site, into our family of services was just too compelling to pass up," said RealNetworks' Glaser in a statement.