Apple Inc. has purchased online music retailer Lala.com, a Silicon Valley startup that has threatened "the end of the MP3" with its fast song-streaming application.
Lala, a private company based in Palo Alto, was launched in 2006 with $35 million in venture capital from Bain Capital LLC, Ignition Partners and Warner Music Group Corp. Lala began as an online CD-trading site but relaunched in October 2008 as a music retailer.
Apple spokesman Steve Dowling confirmed the purchase Sunday, but would not provide any further information, including how much the deal was worth.
"Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plans," he said.
Lala has developed an application -- not yet available to the public -- that allows users to buy the right to stream songs from a digital locker for an unlimited time on their iPhones for 10 cents each.
The song quality is lower than what Apple's iTunes songs offer, but tracks can played in seconds, and cost much less than the songs on iTunes, which generally are priced at 69 cents to $1.29 each.
NBCBayArea.com's Scott Budman earlier wrote about Lala, hinting at a motivation for Apple to buy the company:
Nowadays, the company has a new mission: Bring as many new songs to as many people as possible. And they have some very powerful allies to help: Google, which now directs music-related searches (song names, lyric snippets, etc) to the Lala site; Facebook, which lets you "gift" songs to your friends through Lala; and even Apple, which as I write is looking at a new Lala app for your iPhone that, if approved, will knock your socks off.
Local
Short of bringing peace to the Middle East, this is an amazing coup for a company whose entire staff fits into a little loft in downtown Palo Alto, Calif.. In the few days since announcing the deals, traffic to LaLa has exploded, and with it, new revenue opportunities for a company that has, since the beginning, insisted on cutting the artists in on all of their music sales. Google searches alone will bring a ton of music fans into the LaLa world; the Facebook gift-giving page now has something that's actually real: the gift of music.
LaLa's biggest scheme, though, is probably the iPhone app. I had a chance to try it out, and it makes music easier and cheaper to find and listen to even than iTunes. A couple of finger touches, and you have your entire music library in a cloud. A couple more, and you're listening to, buying (for as little as 10 cents a song), and sharing new music with your friends. You can even make playlists on the go, just like iTunes itself.
Will Apple let this one through? I hope so, not just because it's so darned easy to use, but because it's one of those apps that, on its own, may convince people to choose an iPhone over the competition. All phones and platforms let you find, buy, and download music. I haven't seen any that make it this easy.
I always thought LaLa would make a shrewd acquisition for a media company; now, it seems, they're doing it for themselves, and even doing it on rival platforms. No matter how the economy goes, people will still want to listen to music, and thanks to competition, music is still, at least online, pretty inexpensive. The lesson of LaLa may or may not be learned by giant music companies, but it is being scooped up by legions of online fans, who are now moving the industry towards their own desires.
