ReadWriteWeb

Three years after being bought by Best Buy, online music subcription service Napster has been acquired by rival company Rhapsody. The financial terms of the deal have not been disclosed.

The acquisition will give Rhapsody Napster's paying subscribers as well as "certain other assets" including Napster's IP portfolio. The companies' announcement did not divulge the current number of Napster subscribers, but it's understood to be at least half of Rhapsody's 700,000 subscribers.

Slacker Radio is looking for ways to add revenue to their mobile streams and is teaming with mobile video advertising company YuMe to optimize monetization of its mobile division. Slacker has between 25 and 30 million subscribers, most of whom come to the service from pre-loaded devices on most of the major U.S. carriers. As such, adding a stout mobile advertising model could mark Slacker as the next major force in the competitive music streaming market.

Slacker is in growth mode. With those 30 million members come almost 400,000 paid premium subscriptions. The company is able to convert about 10% of new mobile free subscribers to paid members, a robust number. Yet, it is important for Slacker to optimize its streaming product as 75% to 85% of listening on the service comes from the free streaming product and not the paid on-demand option. That is where YuMe comes in. With Spotify on the rise and Pandora the dominant service in the sector, Slacker has to make as many moves as it can to gain an edge.

Apple plans to shut down Lala, the cloud-based streaming music service it bought in December 2009. Lala stopped accepting new users today and will close on May 31. Thanks to its unlimited music locker and innovative pricing scheme, Lala had long been a favorite of ours. Rumor is that Apple will revive the service is some form under the iTunes.com label, but as with all things Apple, this is just a rumor until Steve Jobs walks on stage and announces it.

Gainesville-based music startup Grooveshark just signed a major label agreement with EMI Music and EMI Music Publishing. While the company is unwilling to disclose the exact terms of the deal, Grooveshark VP of Marketing Josh Bonnain expressed that the agreement is fair and mutually beneficial. The surprise deal comes after EMI filed a June lawsuit against the company. While Grooveshark members gain access to EMI's huge song catalogue including tracks from the Virgin, Blue Note and Astralwerks labels, it'll be interesting to see if the agreement is actually a sustainable one.

Rhapsody, the online streaming music service, just launched its iPhone and iPod touch app (iTunes link). While there had been some discussion about whether Apple would actually allow this 'iTunes competitor' on the iPhone, the approval process looks to have been relatively smooth for Rhapsody. The app feels very similar to Apple's own iPod app. From within the app, you can search Rhapsody's library of 8 million tracks, surf genres, create playlists, or find new music released this week. Overall, we came away quite impressed after testing the app out for a while, though the $14.99/month subscription fee (after a free 7-day trial) will surely keep some potential users away.

In an aside at yesterday's Bandwidth Music Conference, MOG CEO David Hyman mentioned closing a $5 million dollar round of funding with Menlo Ventures. The plucky editorial-based music network offers more than 6000 blog posts per week and an in-depth look at everything from indy to top 40 tracks. The service also offers Rhapsody music integration and a discovery interface with millions more of streaming tracks. ReadWriteWeb caught up with Hyman shortly after his panel to talk about his upcoming plans.

In 2008 Blender magazine named Gainesville Florida the Best Place to Start a Band. With this morning's launch of Grooveshark's new Facebook Share Song application, WordPress plugin and release of their TinySong API, the city is making its mark as a music technology hotbed as well.

If you live in the U.K. and you have 100 British pounds to spare, you can now subscribe to the Datz Music Lounge, where those 100 pounds can buy you unlimited access to DRM-free MP3s for one year. According to Music Week, Datz features about 2 million tracks from EMI, Warner, Beggars Group, and The Orchard. While the service is encumbered by technical problems like having to use a USB dongle, as well as a relatively limited selection of songs, we can't help but wonder whether this all-you-can-eat plan for DRM-free MP3s points towards the future of the digital music business.