April 01, 2004

Circuit City Acquisitions

Circuit City Stores, Inc., to Purchase Assets of MusicNow, Inc.

RICHMOND, Va., and CHICAGO (PRNewswire) - RICHMOND, Va., and CHICAGO, March 31 /PRNewswire-FirstCall/ -- Circuit City Stores, Inc., and MusicNow, Inc., announced today that the two companies have signed a definitive agreement for the purchase by Circuit City of the assets of MusicNow, a leading digital music platform.

"MusicNow is on the cutting-edge of digital music delivery over the Internet," said W. Alan McCollough, chairman, president and chief executive officer of Circuit City Stores, Inc. "MusicNow has developed a strong platform to deliver digital media directly to consumers and to partner with other companies to allow them to power their music download and subscription services."

"In addition to being one of the leading music and electronics retailers in the world, Circuit City brings to our business an important set of resources," said Scott L. Kauffman, president and CEO of MusicNow. "Having a company with those characteristics to support MusicNow is essential for competing in this dynamic market. With the acquisition, we are now strongly positioned to play a major role in the next chapter of the digital media revolution."

MusicNow will retain its own brand and continue to execute on its strategy of empowering third parties to launch digital music services.

"We're thrilled to be gaining the knowledge and expertise in the digital media space that MusicNow brings, and of equal importance, to welcome its world class team," said Fiona Dias, president of Circuit City Direct. "Circuit City will integrate MusicNow's platform into Circuit City's Web site at circuitcity.com as well as our nearly 600 Superstores across the country."

The transaction is not expected to have a material impact on Circuit City's fiscal 2005 earnings and is expected to close in April 2004.

About Circuit City Stores, Inc.

With headquarters in Richmond, Va., Circuit City Stores, Inc. puts the customer first with high-quality service and more than 5,000 consumer electronics products available in its stores and online at http://www.circuitcity.com/. Top-quality, low-priced products; detailed product information; and product specialists, who complete extensive online and in-store training programs, are all part of Circuit City's promise to provide superior consumer electronics solutions to its customers. Circuit City's store revitalization program reflects the changing needs of consumer electronics shoppers, the stores are brighter and more open, the aisles are wider and virtually every product Circuit City sells is on the sales floor for easy customer access. Circuit City operates 599 Circuit City Superstores and five mall-based stores in 157 markets.

About MusicNow, Inc.

MusicNow, Inc., formerly known as FullAudio Corporation, develops a legal online music store and service with more than 40 channels of original music programming and content from all five major labels -- BMG, EMI, Sony Music Entertainment, Universal Music Group and the Warner Music Group--as well as the independent labels Koch and Sanctuary. Customers have the option to either purchase tracks and albums a la carte or subscribe to MusicNow's subscription service, which provides unlimited access to the music in MusicNow's library for a monthly subscription fee. MusicNow is primarily marketed through distribution partners, which include SBC Yahoo DSL, Charter Communications and Microsoft. Founded in April 1999, MusicNow manages the software and systems that cover every aspect of music content aggregation and delivery including content acquisition and management, media storage, secure delivery and digital rights management to ensure that all rights holders are fairly compensated for their work. MusicNow is based in Chicago, with offices in Palo Alto, CA. For more information or to subscribe to MusicNow, please visit http://www.musicnow.com/.

Forward-Looking Statements

This release contains forward-looking statements, which are subject to risks and uncertainties, including without limitation statements regarding the timing and ultimate completion of the proposed acquisition of the MusicNow assets, Circuit City's ability to integrate and operate MusicNow successfully and MusicNow's ability to achieve projected operating results. Additional discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is set forth under Management's Discussion and Analysis or Results of Operations and Financial Condition in the Circuit City Stores, Inc. Annual Report for fiscal 2003 and Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2003, and in the company's other SEC filings. A copy of Circuit City's annual report is available on the company's Web site at http://www.circuitcity.com/.

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Circuit City Stores, Inc., to Purchase Assets of MusicNow, I... - Mar. 31, 2004

Posted by Craig at April 1, 2004 05:44 PM