Report: Apple Bought Lala To Thwart Google

10:47 am, December 11th, 2009, Ed Sutherland

Lala, the streaming-music startup Apple recently purchased for a reported $85 million, was just the latest chess piece in a competition between Cupertino and the Internet giant Google. The Mountain View, Calif. company was in “serious discussions” to purchase La La Media prior to Apple’s recent acquisition, according to The Wall Street Journal. The newspaper Friday cited insiders with knowledge of the issue.

Although Apple was the victor in that case, Google had earlier paid $750 million for AdMob Inc., a mobile advertising firm that the Cupertino, Calif. based iPod-maker was also pursuing. The two cases reflect a heated competition between the two companies which are butting heads on a number of fronts. In the case of La La, Google wanted a greater piece of the online music pie (an area in which Apple is already well-entrenched) and Cupertino eyed AdMob as a path to greater involvement in advertising, a lucrative area for Google.

For Apple, the La La acquisition may have thwarted tighter integration of music with Google’s recently-unveiled Chrome OS, which would allow music fans to listen to their songs without a separate application, as is now required by iTunes. La La’s purchased prompted reports Apple was considering a Web-based iTunes service.

Both Apple and Google are also competing in the handset arena. Google’s Android software powers Motorola’s Droid smartphones sold through Verizon and seen as competition for Apple’s iPhone. The two companies hope to attract more developers to the platforms. The Mountain View, Calif. based Google is also discussing ways to increase its brand exposure, offering more Google applications, as well as a more prominent identification with the phones, the report said.

Such a battle over technology may depart from Apple’s traditional practice of inventing hardware and software in-house, rather than through purchasing an outside company. However, with Apple’s $34 billion and Google’s $22 billion of ready cash, the competition between the two companies is likely to continue.

[Via iClarified and Wall Street Journal]

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About the author

Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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