Best Buy Co Inc. announced Monday that it plans to purchase online music service Napster for a cash deal of $121 million. Best Buy indicated that it plans to use Napaster to compete with Apple’s dominating iTunes music store.

In a recent announcement, Apple CEO Steve Jobs indicated that iTunes is now the leading retailer of music, jumping ahead of Amazon.com, Walmart and Target. Previously, Best Buy and Napster were both competitors and both competing for the top spot along with iTunes. But now, both companies agree that there’s a better chance to beat Apple if the two combined into one service.

According to Napster’s CEO Chris Gorog, the company is more than excited to combine with Best Buy.

"This is a very natural and appropriate time for Napster to lever up our position in the industry with a strategic bear hug from such a powerful partner," said Gorog, referring to Best Buy.

While the Napster brand is no longer deeply associated with music sharing as it use to be back in the late 90’s, the brand still has a strong loyal following, especially for legally downloaded music. Napster indicated that it has roughly 700,000 paying subscribers, but it’s stock price eroded recently from threats of hostile takeovers from outside firms.

With the Best Buy acquisition, most of Napster’s employees will remain. Gorog and other key members of Napster’s staff have already signed employment agreements with Best Buy.