AOL announced that it has agreed to make Napster Inc. (NASDAQ: NAPS). its exclusive online music subscription service.

On Friday the two companies said they it will work together to migrate approximately 350,000 paid subscribers of AOL's Music Now service to Napster's digital music subscription service.

Additionally, AOL will promote Napster with links to the Napster service throughout AOL's free music site, AOL Music.

We are pleased to provide our subscribers the opportunity to seamlessly transition to Napster, which will become the only music subscription service integrated into AOL Music, said Mike Rich, Vice President, AOL Entertainment. Music Now subscribers can look forward to enjoying a world-class music experience from Napster.

Customers who already have accounts on Music Now will be migrated over to Napster automatically. Napster will re-create migrating customers' existing personal music libraries, including and playlists. The company will even retain Music Now's current pricing tiers for incoming customers and transfer any existing credit they have.

AOL and Napster expect to complete the service migration within the

next 60 days.

Napster shares closed up 30 cents, or 7.85 percent, to $4.12 in the Nasdaq exchange.

Software NAPSTER, INC.