14 DAY TRIAL // Reports have emerged this weekend with talk of Apple acquiring Palo Alto startup Lala. The service partially resembles iTunes (in the way users purchase music), but instead of downloading tracks, users stream them to their Internet-capable devices for just ten cents a track. The songs are stored on the “cloud” and can be listened to by the purchaser anywhere, as long as there’s an Internet connection. Word of the acquisition first came last week, from inside the acquired company itself.
Not many people expected Apple to issue an official statement regarding the acquisition, but the Mac maker did. Apple spokesman Steve Downling told The New York Times that, “[Apple] buys smaller technology companies all the time, and we generally do not comment on our purpose or plans.” The company previously issued a similar statement when acquiring a small chip-designing company called P.A. Semi.
A person familiar with the matter was able to offer his opinion saying that Apple was most likely buying the company for its engineers and co-founder Bill Nguyen. The person, however, did not disclose other details of the deal, not being authorized to discuss it. However, the person did add that negotiations between Apple and Lala originated when the latter’s execs came to the conclusion that prospects for turning a profit in the short term were dim. It was then that Lala started discussing a potential acquisition by Apple with Eddy Cue, Apple’s vice president in charge of iTunes.
David Goldberg, head of SurveyMonkey and the former general manager of Yahoo Music, offered his own opinion regarding the deal, saying, “I am sure Apple is watching streaming music, the traction of Pandora, of course, and other streaming applications on the iPhone. There’s a legitimate question here: Why should people have to download music?”
We could write down a dozen reasons, but let’s see what happens first. In the meanwhile, tell us what you think in the comments. Could you live in a world where music playback was dependent on having an Internet connection?