Sony

Sony and Bertelsmann might soon be seeking music to mend a broken merger. The future of Sony BMG Music Entertainment, a 50-50 joint venture between Sony Corporation of America and Bertelsmann, is uncertain after a European court annulled the European Union's approval of the merger that created the company. The #2 record company in the world (behind Universal Music Group), Sony BMG operates primarily through its stable of recording labels, such as Columbia, Epic, and RCA, and boasts an artist roster that includes Aerosmith, OutKast, and Britney Spears. The court's surprise 2006 decision could force the company, formed through the 2004 merger of Sony Music Entertainment and BMG Entertainment, to be unwound.

While the mega-sized merger was able to catapult Sony and BMG (previously the third- and fifth-largest record companies, respectively) past EMI and into the #2 spot, the deal came as somewhat of a surprise given the industry's three-year-long slide in album sales. The delicate act of combining former rivals was achieved by stitching together a management team that gave equal representation to both Bertelsmann and Sony. That balance was upset by internal squabbling and the departure of COO Michael Smellie at the end of 2005. The following year CEO Andrew Lack stepped down to become chairman of the joint venture and former BMG chief Rolf Schmidt-Holtz, who had been chairman, took over as CEO.

Sony BMG's sales have increased from its involvement with the hit TV show American Idol, courtesy of music impresario and Arista Records founder Clive Davis. Winners Ruben Studdard and Fantasia Barrino have produced top selling albums for Davis' J Records, while first-season winner Kelly Clarkson has shown some staying power recording for RCA.

Memorex

Memorex Products manufactures recordable media, including magnetic diskettes and tapes and optical disks. It also offers computer peripherals, such as optical storage drives (CD-RW, DVD-RW), keyboards, mice, and flash card readers. Memorex was established in 1961 as a supplier of data backup tapes for mainframe computers. The company branched out into recordable audio cassettes in 1971, launching its famous "Is it live or is it Memorex?" ad campaign, and started marketing recordable VHS-format videotapes in 1979. Memorex began making data storage products for the consumer market in 1996. Imation acquired Memorex from Hanny Holdings for $329 million in 2006.