Apple paid $17 million for Lala, the streaming music site, according to reports Tuesday. The final purchase price was even lower – $3 million – due to $14 million already in the Palo Alto, Calif. company’s coffers, said TechCrunch.
“Lala had plenty of cash in the bank, but they were burning $500k/month,” according to sources with indirect knowledge sited by the blog. The purchase price is similar to similar media buys, such as MySpace’s $10 million deal for social-music site iLike or the $1 million paid for music site iMeem.
The site refuted Monday’s report that Apple paid $80 million for Lala. That report by Media Memo also suggested Apple’s aim was Lala’s engineers.
“In the end, Apple bought the company to get its hands on the company’s engineers, who had built a slick streaming service as well as an iPhone app that Apple has yet to approve,” Peter Kafka wrote.
TechCrunch believes Apple wanted to acquire Lala’s engineers and the $3 million deal with Google. Speculation had centered on the Cupertino, Calif. company using Lala’s software to enhance iTunes and other applications.
iTunes and other Apple services reportedly were born from similar acquisitions. In 2000, Apple purchased SoundJam MP, also acquiring its developer – Jeff Robin. Robin went on to become Apple’s vice-president of consumer applications. In another instance, the iPod was largely created out of the aftermath of a deal with PortalPlayer. The Cupertino, Calif. company purchased the rights to the hardware and software, leaving the company to be purchased by Nvidia.