Apple acquires Lala Media – WSJ, NY Times

Black Friday/Cyber Monday Apple Blowout“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.]

30 Comments

  1. Very glad for this. Lala.com rules. Never could figure out why more people didn’t take to it. I’m surprised Facebook didn’t buy them, though. Seems like that would’ve been a perfect fit for them.

  2. “…There would be no such uncertainty with Apple.”

    I don’t trust anyone’s servers. They don’t have to belong to some start-up.

    FWIW, I don’t trust Apple’s servers, either.

    I want my music on my iPod’s harddrive, not in some “cloud.”

    Why would Apple suddenly get involved in the type of music distribution that the music industry has been futilely trying to make a go of for as long as Apple has been telling everyone in the music biz that consumers want to “own” their music?

  3. You do “own” your music with Lala.com. You are mistaking Lala for some sort of subscription service like Rhapsody. You obviously need to read more carefully before you open your mouth.

  4. I could envision this acquisition being used in at least two ways. First, the web based version of iTunes which lets you preview songs, might now let you purchase them through the web. It could then store your music in your mobile me account and sync to your your computer.

    Secondly, *if* Apple creates and sells a table machine, and *if* they offset the cost of the machines with a subscription service for newspapers. They might also sweeten the deal by including music, television shows and perhaps even movies in the subscription service.

    If Apple were to buy Safari Books, then I would know that they were building a table and would be offering a subscription service. But until they do… this is all just speculation.

  5. “You do “own” your music with Lala.com. You are mistaking Lala for some sort of subscription service like Rhapsody. You obviously need to read more carefully before you open your mouth.”

    Too late. Paul Thurrot is already getting ready to do the “Apple copies Zune” hitpiece on this. Right after he’s done with his “80% of Mac users run BootCamp, so pretty much no one like Mac OS X” article.

    You just know boneheads like Leo Laporte are going to be spouting on air, that this is a tipping point where Apple is starting to feel the ‘heat’ from the Zune…..

    ugh…

  6. This is all about MobileMe “syncing” of your iTunes music collection… your purchased music can be “synced” anywhere and listened to anywhere. “Access your music from anywhere.” Apple couldn’t do REAL syncing of music because syncing gigabytes upon gigabytes of music isn’t really feasible with today’s sloooow upload speeds. So while Apple’s marketing might say that you’re “syncing” your music, you’re really simply “streaming” the music that you’ve already purchased. Buy the music on one Mac, have instant access to it from all other devices.

  7. My album is listed on iTunes and on LaLa too. I must say that I’d prefer people to buy it from iTunes where I would receive 70 cents of each song’s purchase price, rather than LaLa, where I would receive a penny, maybe. The same goes for Rhapsody, Napster, and all the others. Amazon is the second-best, but even Amazon gives their discount at the musician’s expense, not the retailer’s.

    Shades of the bad old days, where the musicians regularly got shafted by the record companies. Deja vu all over again.

  8. Actually, this all about streaming around the house, to my TabletMac.

    The engineers and their corporate knowledge were the key acquisition, much on the same way Microsoft acquired Connectix.

    Syncing via streaming will also be availble through your home’s server or Mobile Me if your on the road.

    Finally, the Time Capsule will have additional capabilities, as will Apple TV; I can stream my stuff to any point on the planet.

  9. Again, Apple is skating to where the will be while the WSJ and the Times are still thinking about music.

    Have you noticed that the only people who know nothing about the topic are doing all the writing, and those who do know are anonymous? Too bad the journalists don’t even know the right questions to ask and suffer with rolling disclosure!

  10. At last it seems that Apple are looking at the impact that LastFm and Spotify are having which to my mind is the only area where Apple are or could be outflanked.

    However as others have said I think the scope of this is in the concept and could spread much wider with the tablet, MobileMe, Apple TV and others all potentially playing an important part.

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