Apple Buys Music Start-Up Lala for $80M
Apple ended up paying around $80 million for Lala, according to many sources, which is 50% less than what the company was worth in 2009, according to Peter Kafka of the Wall Street Journal's All Things Digital. The company had raised about $35 million so far.
The Lala team is credited for selling the company. The company's real asset was its technology team. Apple supposedly bought the company to get its hands on its engineers, who had built a music streaming service as well as an iPhone application, which Apple has yet to approve.
The last time a digital music company was sold was in 2007, when CBS paid $280 million for Last.fm. Pandora Media raised an additional $35 million this summer after a royalty deal helped the Internet radio company. Venture-backed MOG has just launched a streaming music service, too.
NPR reported on the Marketplace radio show that Apple may be moving into streaming music over the web as opposed to the download model, which is the current iTunes Model. a streaming model means that iTunes could turn into a subscription service.
Erica Ogg who covers Apple for CNET.com, continued to say that this model means that you no longer have to host music on your own computer. The music sits in the cloud. This may be attractive for people who don't have their computer or iPod with them.
Ms. Ogg said that Lala is building a huge data center in North Carolina. Apple may be interested in Lala's new server farm.
