Report: Apple Looking To Buy Lala
December 4, 2009 at 3:40 PM (PT)
SOURCES tell BLOOMBERG that APPLE INC.is in negotiations to buy online music service LALA, which is currently owned by BAIN CAPITAL VENTURES and IGNITION PARTNERS in BELLEVUE, WA. The terms of the deal for privately held LALA weren't known.
LALA lets users listen to any of its 8 million songs on the site once for free, then opt to buy the track for 10 cents and listen to it on the Web. LALA’s music is stored on servers, or in a "cloud," instead of being downloaded to the user’s computer.
"There’s a big question in the industry about what will be the dominant way people will obtain music, whether it’s stored in the cloud or whether it will be on a hard drive," former UMG digital unit honcho LARRY KENSWIL said. "APPLE is wise to cover its bases because it’s only in the download business."
Such a deal would compete against GOOGLE's ONE BOX, which currently allows users to listen to and purchase songs from its search page through LALA and ILIKE.
A LALA deal could also indicate that APPLE is becoming more interested in a music subscription service. "Maybe they are ready to do that," KENSWIL told BLOOMBERG. "The LALA model is somewhere between the two, of permanent ownership" and a subscription model."