September 8, 2010, 2:37 PM

Amazon tunes in a deal for AmieStreet.com

Amazon has acquired AmieStreet.com, an online music store and social media site.

Mark Brohan

Research Director

Lead Photo

Amazon.com Inc. has made another acquisition and this time the deal is meant to bolster the biggest online retailer’s digital music business.

This morning Amazon, No. 1 in the Internet Retailer Top 500 Guide, acquired AmieStreet.com, an online music store and social media site featuring independent artists. The purchase price was not disclosed.

AmieStreet.com, which was founded by several Brown University students in 2006, featured a unique pricing model that used a software algorithm to set pricing on recordings by independent artists based on demand. The more times a recording was downloaded, the more the artist could charge up to a maximum of about $1. Amazon closed down the independent music store this morning after AmieStreet.com disclosed the deal on its web site. Amazon and AmieStreet didn’t say why the store was closed so suddenly but did offer visitors a $5 promotional code to spend at the Amazon MP3 store. The coupon is good through Dec. 1, says AmieStreet.com.

AmieStreet.com had received some undisclosed funding from Amazon in the past, but the timing was right for an acquisition, company CEO Elias Roman said in a posting. “We believe we’ve found a great home for AmieStreet.com and are committed to making this transition as smooth as possible,” says Roman. “The folks at Amazon have been our advisers since they invested almost four years ago.”

Amazon isn’t talking publicly about the acquisition.

But now that its music store is closed, AmieStreet.com’s founders say they will continue to build and distribute Songza, a social music service Amie launched in 2008 that lets users share their music with friends and family. Songza, which features a music library of more than 8 million songs, lets users set up and run their own Internet-based radio stations, the company says. “We hope you’ll continue with us on our journey with the new Songza.com,” Roman wrote in his posting.

Amazon, which made the largest acquisition in the online retailing market last year when it acquired Zappos.com for about $900 million in cash and stock, in June acquired daily deal site Woot.com for an undisclosed amount.

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