Apple, Google vie for startups as Google takes AdMob and Apple buys Lala

“Google Inc. and Apple Inc., which have long thrived without treading on one another’s turf, are vying to acquire some of the same Silicon Valley start-ups and developing products that put themselves in more direct competition,” Jessica E. Vascellaro and Yukari Iwatani Kane report for The Wall Street Journal. “Google was in serious discussions to acquire online-music company La La Media Inc. before Apple won the deal this month for $85 million, people familiar with the matter said. Apple also pursued a deal for mobile-advertising company AdMob Inc. say people familiar with the matter; Google agreed to buy the start-up in November for $750 million.”

Vascellaro and Kane report, “For years, the two giants focused on different parts of the tech market, with Google dominant in Internet search and Apple making computers and consumer electronics devices… [But today], Google is developing an operating system that would run on computers that compete with Apple’s Macintosh machines. It has released a Web browser that competes with Apple’s Safari. The two giants are also duking it out in the mobile arena, with phones using Google’s Android software, like the Motorola Droid, challenging Apple’s popular iPhone.”

Vascellaro and Kane report, “People familiar with Apple’s thinking say it wanted to acquire AdMob to profit off the advertising in some of the apps in its App Store… These people say Apple also tried to buy AdMob as a defensive measure to keep Google from learning details about its App Store. AdMob, which sells ads inside applications, has access to data about the mobile marketplace. Meanwhile, Google is getting more ambitious about digital music, an area where Apple’s iTunes has been dominant. Google recently launched a music search and listening service with Lala as one of several partners.”

Vascellaro and Kane report, “More acquisitions could be in the works as Silicon Valley dealmaking heats up overall… Google, which has nearly $22 billion in cash, has been particularly active. In addition to AdMob, Google bought display-ad company Teracent Corp. and Internet-phone provider Gizmo5 Technologies Inc. in November. Last week it purchased AppJet Inc., a maker of online collaboration software. Apple, which has $34 billion in cash, has been exploring buying iPhone-related technologies that it doesn’t yet have, say people familiar with the matter.”

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