LiveWire acquires Groove Mobile for $14.5 million

The all stock transaction calls for the purchase of every outstanding share of Groove, and gives LiveWire a larger presence in the mobile music download market.

Prior to the transaction, Groove offered services across the mobile music and video spectrum, including ringback tones, ringtones and music downloads.

With the addition of Groove, LiveWire gains some large provider contracts like those from Sprint, 3 UK, and Bell Mobility, among others. The company's total presence will expand to 42 countries with about 15 million active subscribers.

"With our combined capabilities, we are now in a unique position to deliver what operators and subscribers have been asking for --an integrated personalization offering," Groove chairman and CEO Eric Giller said in a statement.

JupiterResearch expects mobile music to become a $10.7 billion business in 2008, growing to $17.5 billion within four years. With Groove in tow, LiveWire could be able to command a significant slice of that revenue.