Apple Buys U2 for $1.8BOctober 11, 2006
In what many are calling a sure sign that a new bubble has arrived, Apple Computer (AAPL) today announced that the company had acquired the legendary rock band, U2. The transaction, which was confirmed before the markets opened this morning, was valued at $1.8B. Apparently the deal was pushed through late last night with some urgency, following Google's purchase of Web 2.0 darling YouTube for $1.65B.
Apple co-founder and CEO Steve Jobs acknowledged as much in the statement released this morning:
"While many of our competitors are investing their shareholder's money in small, unproven, Web 2.0 companies, we've decided to invest in content. And there's no greater content than the ultimate Rock 'n Roll 2.0 band, U2. The band shares our commitment to excellence, passion for creativity, and love of a great melody."
U2, led by lead singer and noted humanitarian Bono, has been a fixture in Apple ads and is also featured on the only iPod designed for a band. Bono and Jobs have grown increasingly close during the past two years and merging the two world-renowned brands seemed like the logical next step.
The deal, with details still being finalized, assures U2 a prominent role in Apple's numerous media properties. U2 will be a permanent feature on the iTunes homepage, highlighting the band's entire music catalog, as well as all music videos and feature-length concerts through the iTunes Movie Store.
All future U2 albums will be available exclusively through iTunes for the first month of release and the band has agreed to produce a monthly podcast, giving people an inside look at life inside the world's most popular rock group. The podcast will also be an iTunes exclusive.
The new partnership is not one-sided, however. U2 will be the featured performers at a brand-new, three-day concert and Apple festival called MacStock. The annual event will take place in New Orleans and replaces the current Macworld Conference held each January in San Francisco. The three days will kickoff with a keynote from Jobs, followed by numerous general sessions, workshops, demonstrations and what Apple calls, "Interactive Explorations." Multiple "Art Tents" will be setup for artists of all kinds to demonstrate their craft.
The evenings will feature over five hours of music, concluding with a full U2 concert. The band is expected to tap many of its high-profile friends and musicians to populate the rest of the schedule. Fourty-percent of the proceeds from the festival will be donated equally to fight world poverty and rebuild New Orleans, causes shared by both Bono and Jobs. One proposal currently under consideration would dedicate the third day of the event to social causes and may include a "significant address" by a world leader. Names mentioned include President Bill Clinton, investor and philanthropist Warren Buffett, and Bono himself. With his recent and substantial push into charitable causes, Microsoft's Bill Gates is listed as a potential "surprise guest."
U2 is also providing over 250 exclusive music samples from throughout their career to produce the first "U2 Jam Pack", an add-on for GarageBand that will allow anyone to add a touch of U2 to their original composition. The pack will be available early next year for $69.
There is unconfirmed speculation that many of Apple's products will be renamed to reflect the new relationship, including iTunes - uTunes, iLife - uLife, and possibly the ultimate re-branding, iPod - uPod. A less likely scenario involves U2 renaming itself i2. Though a band does not exist by that name, a large technology company does, and most analysts remain skeptical.
All four members of the band will become Apple employees, though they will continue to operate out of Dublin.
"U2 connects with culture better than anybody I know," Jobs said in the release. "I look forward to working with them to develop insanely great products in the years to come."
The release closed with this quote from Bono: "Apple exists for the same reason U2 does - to make people smile, to make people think, to change the world, and send our kids to college. What can I say - it's a beautiful day!"
File under: parody.