Best Buy's chief executive Richard Schulze touted thedeal to buyMusicland, based in Minnetonka, MN, as away to get to a whole newbase of customers--womenshoppers at Musicland's Sam Goody stores inmalls,rural shoppers at its On Cue stores in small townsandtech-savvy shoppers at Magnolia. He also arguesthat adding consumerelectronics products, such as MP3players and other wireless anddigital products willbe able to pump up sales at Musicland's morethan1,300 stores.

"We have plans to transform Sam Goody stores with newtechnologyproducts, and we expect it to be ameaningful expansion strategy forus," Schulze says.But investors are worried about increasedexposure toa weak and threatened music retail industry, aboutthenegative short-term impact the deal will have on BestBuy'searnings and about spending so much cash whenthe economy is takinga downturn.

Also, it's unclear what impact the merger may have onMusicland'scorporate staff, although both companiesinsist no layoffs areimminent. Best Buy spokeswomanLaurie Bauer says it hasn't yet beendecided if BestBuy will move Musicland's corporate operations tothenew corporate campus it plans to build in Richfield.Best Buy,with 413 stores in 41 states, says theacquisition does not affectsits plans to open its ownBest Buy stores at an annual rate of about60 in thenext four years.