Motives and Possibilities for a Big Apple Acquisition

The tech industry has a new favorite sport: guessing who Apple will buy with its $50 billion-plus cash hoard. Since October 18, when Steve Jobs mentioned the company was keeping its powder dry for possible deals, speculation over potential Apple acquisitions has run rampant and even includes household names like Sony and Disney.

Cloud in the Forecast For Apple

Why shut down Lala if there’s no chance of launching an iTunes.com? Because cloud-based media storage and retrieval is central to Apple’s long-term strategy, and Lala is central to implementing that plan.

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Apple has never said what it intended to do with Lala, the streaming music rental service it bought late last year. But the announcement today that Lala is no longer accepting new users and will shut down altogether on May 31 is fueling speculation that some sort of web-based version of iTunes will be announced shortly. Back in January, however, the CEO of MP3tunes.com, Michael Robertson, wrote a very interesting story suggesting that Lala would become more than simply a streamed version of iTunes but would form the foundation of a far-reaching cloud-based media strategy by Apple. Now that the media-centric iPad is a reality, Robertson’s piece is looking more prescient than ever.

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Lala land. Apple confirmed Sunday that it has acquired cloud-based music streaming service Lala. No price was disclosed, but talks between the companies reportedly began after Lala’s founders concluded their prospects for turning a profit were dim. For its part, Apple has been rumored for months to be interested instarting¬† a streaming service. One other possible attraction for Apple: Lala was picked by Google to provide content for its enhanced music search service back in November. While that may not have made a lot of money for Lala, it had the potential to be disruptive to iTunes by steering Google users away from the Apple download service.

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It seems to be online music week. First came word of Google’s plans to One Box music search results, including links to Lala.com and iLike. Then came Facebook’s announcement that it will integrate Lala into its popular gift store. Vevo is reported to be in talks with EMI and Warner Music, while MySpace said it is creating a New Music Video hub and expanding the music video selections in its search results. Will it all add up to a business in paid music online? Lala Media CEO Bill Nguyen, who wasn’t even aware of Google’s plans before they were announced, thinks the Facebook deal “may be the most significant thing since the ring tone.” It’s early yet, but it could turn out that search — long a popular way to find illegal music online — could become the music industry’s new best friend.

Facebook Users Will Soon Be Able to Give the Gift of Music

lalaUpdated with confirmation from Facebook: There’s more than one way to post a song on someone’s Facebook profile — an Imeem link or a YouTube video, to name two. But Lala.com is set to become the first streaming music provider to offer songs as virtual gifts in Facebook’s store, according to a report today on the New York Times’ Bits blog. Several Facebook third-party apps already provide song streams, and the company has toyed with the idea of introducing a music service for some time. (Its most popular music app, iLike, became a MySpace property at a fire-sale price this summer.) Today’s news, however, represents Facebook’s first true foray into music, as well as a vote of confidence in Lala’s paid-streaming model. Read More about Facebook Users Will Soon Be Able to Give the Gift of Music