Apple goes gaga for Lala

Posted Dec 5th 2009 2:40PM by Tom Taulli
Filed under: Deals, Apple Inc (AAPL)

Lala, an online music service, certainly has had many advantages. The team is top-notch, with veterans from companies like Yahoo! (YHOO), eBay (EBAY) and Blogger. They also have had the benefit of learning from the many failed companies in the music space. Oh, and Lala was able to raise a substantial amount of money.

But, somehow this was not enough. If anything, Lala continued to languish and as a result, agreed to sell out to Apple (AAPL). The terms of the deal were not disclosed.

Although, Lala does have an interesting approach. From the browser, a user can easily search and stream songs at 10 cents each (there are no downloads). In other words, this could be a great platform for Apple's iPhone. There's even the possibility of putting together a subscription service.

Besides, Lala has developed cutting-edge technology, especially in terms of cloud computing. So, Apple will get some top engineers in the deal.

This deal also highlights something else: companies like Apple can pick up juicy assets at good prices. After all, a variety of online music operators have failed lately, such as Ruckus and SpiralFrong. So it's a good bet we'll see other such deals soon.

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: AAPL, Apple, eBay, intheews, iPhone, Lala, online music, streaming music, Yahoo, YHOO