Apple Paid $80 Mil. For Lala
Last week we learned that Apple had acquired music streaming service Lala. Now information is out saying how much they paid for it, and it was no small sum, to be sure. According to multiple sources, Apple paid no less than $80 million for their acquisition of Lala. The sum is less than half of what investors valued the company at in 2008, yet it’s more than the $35 million Lala brought in during their existence.
Interestingly, Warner Music Group invested $20 million into Lala, but wrote down $11 million in March, so it’s unknown if they will regain their $20 million or just the amount after the write-down.
Despite having $10 million of their own in the bank, it seems that Lala was hoping to find a larger partner due to concerns about their ability to hold up on their own in the long-term.
Apple’s reasoning for purchasing Lala is still a mystery, which Apple undoubtedly prefers. Theories include Apple buying the company just for the engineers so they can incorporate the technology into their existing services or if they are actually looking to enter the music streaming business as a separate venture.
Analyst Maynard Um with UBS says the acquisition is part of Apple’s plan to make access to owned media omnipresent, allowing you to access your music wherever you are. In a recently released research note, Um says that it will broaden Apple’s halo approach and that, “drives future additional Apple product sales.”
“We believe the Lala acquisition fits into our view that Apple is building a data center for a service to provide seamless access and mobility of digital content across all its products including media-focused content of iTunes and user-generated content of MobileMe.”
Either way, $80 million is a lot to spend just to kill a company, so we’re hopeful that we’ll see streaming music from Apple in the not-too-distant future.