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With the announcement that iTunes has become the #1 retailer of music in the USA and MySpace announcing its own online music store, the fact that anybody wants to buy Snocap is bewildering. But as announced earlier today, Imeem just bought the struggling digital music service company.

From Billboard:

Imeem itself is a customer of the service, using Snocap to identify tracks uploaded to the Imeem service by users to ensure content owners have allowed the full streaming of their music, as well as manage the ad-share revenue payments back to the appropriate label and artist each time a registered song is played via Imeem. Other customers include MySpace, which uses Snocap’s MyStores widget to let independent and unsigned artists sell individual tracks to fans via MySpace profiles.

Snocap has been struggling over the past year and was actively seeking a buyer. Although the registry contains more than 7 million tracks from all major labels, few services use the database and those that do are relatively minor in comparison to the market-leading iTunes music store. The once-hyped Mashboxx P2P service was supposed to be Snocap’s coming out party three years ago, but that service never launch, and likely never will.

The MyStores widget, meanwhile, never caught fire with the robust MySpace artist community. Many artists complained Snocap charged excessive per-track fees, which led to high-priced downloads to fans and leaving little left for the artist.

I mean, Snocap looked kinda cool on paper (or on screen, rather) — little independent bands could host a widget directly on their MySpace and fans could buy MP3s…but the service was only free to bands for the first year, and Snocap took a healthy percent of the sales, and I’m pretty the bands were obligated to stay on for another two years and pay Snocap for the privilege of gouging them…that’s why I never signed up for that shit. I call BULLSHIT on the Snocap model. Now it’s in Imeem’s court. Lemme know how that works out for ya…