RUMOR: Apple is in talks to acquire music streaming service Lala
Posted on December 4, 2009 by eli courey
Apple is close to acquiring digital-music service Lala, according to two sources with knowledge of the discussions.
Talks are very advanced, said the sources Friday. One of the sources said that the sides have already agreed on terms and have only to sign a final agreement.
Steve Dowling, Apple’s spokesman, said the company doesn’t comment on rumors and speculation. A representative from Lala was not immediately available.
An acquisition of Lala, a streaming-music site that sells songs for 10 cents enables users to store their music libraries on the company’s servers, has gone through multiple iterations. Lala was once known as a CD-swapping service before it began streaming music to users’ PCs.
Exactly what Apple intends to do with Lala remains unclear. Right now, Apple is the largest music store online or offline and has made more money than any other music service by selling downloads. CEO Steve Jobs could have plans to start a streaming service, but my sources, told me Friday that Apple managers are very interested in working with Lala’s engineers, who have come up with “a payment and fulfillment system that could save Apple millions of dollars a year.”
In addition, Apple wants Lala’s founder Bill Nguyen to come over as part of the acquisition, another source said.
Nguyen is a well-known and respected Silicon Valley entrepreneur who has hammered away for years trying to find a music service that is popular with users (meaning cheap and easy to use) while also generating profits.
According to music sources, the affable Nguyen is also one of the more popular figures from the tech sector because he has typically focused on generating profits as much as whiz-bang technology. That is not always the case, the sources said.
That said, Lala is not believed to be profitable.
If the deal should go through, it would be the third acquisition deal of a digital-music site in recent months. MySpace acquired iLike in August and Imeem last month.
If Apple is planning some kind of streaming service, the public has shown an appetite for the kind of streams that are free of charge and ad-supported.
Many music fans have also clamored for a better way to store music. Right now, most music libraries can be found on an owner’s computer hard drive, which can malfunction. Lala enables users to store songs on the company’s servers and access them from Web-enabled devices.