“Apple Inc. acquired online music company Lala Media Inc., possibly signaling an expansion of the computer giant’s music strategy,” Ethan Smith and Yukari Iwatani Kane report for The Wall Street Journal. “Terms could not be learned.”
“Palo Alto, Calif.,-based Lala lets users pay 10 cents for permanent access to ‘Web songs’ that can be streamed via a Web browser but cannot be downloaded to a user’s computer hard drive or to portable players like iPods,” Smith and Kane report. “But the three-year-old company is developing an iPhone app that would greatly expand the service’s reach, by making Lala Web songs available on the go via the phone’s wireless Internet connection.”
“Lala has faced some financial turbulence this year. Warner Music Group Corp. in 2008 disclosed that it had invested $20 million in Lala,” Smith and Kane report. Then earlier this year the company announced it was writing down $11 million of that investment, signaling that the startup had lost nearly 50% of its value.”
Full article here.
Brad Stone reports for The New York Times, “In the most recent sign that Apple is looking at alternative ways for people to store and play their digital music, the company has agreed to buy Lala, a four-year-old start-up based in Palo Alto, Calif., a person with knowledge of the deal said Friday.”
Stone reports, “Steve Dowling, an Apple spokesman, said the company “buys smaller technology companies all the time, and we generally do not comment on our purpose or plans.” A Lala representative could not be reached. News of a possible deal was first reported earlier on Friday by Bloomberg News and CNet, a technology news site. Terms of the deal were not disclosed.”
“One person with knowledge of the deal, but who was not authorized to discuss it, said that the negotiations originated when Lala executives concluded that their prospects for turning a profit in the short term were dim and initiated discussions with Eddy Cue, Apple’s vice president in charge of iTunes,” Stone reports. “This person said Apple would primarily be buying Lala’s engineers, including its energetic co-founder Bill Nguyen, and their experience with cloud-based music services.”
Stone theorizes, “One reason Lala may not have taken off is that people do not necessarily want to entrust their music collection to the servers of a start-up whose prospects are uncertain. There would be no such uncertainty with Apple.”
Full article here.
[Thanks to MacDailyNews Readers “Fred Mertz” and “james W.” for the heads up.]