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Apple Purchases Lala, Details And Plans Remain Unclear

December 6, 2009

Pioneer online music vendor Apple Inc has recently purchased digital music service Lala. 

As more and more newcomers attempt to edge their way into the online music industry, many analysts see the acquisition as a savvy move by the media monolith in an effort to trailblaze new means of marketing music and stay ahead of the competitive curve.

The buy-out was confirmed on Friday, though neither Apple nor Lala has yet offered to disclose the details of the agreement.

“Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plans,” said Apple spokesman Steve Dowling in an official statement.

Though iTunes continues to command a whopping 70 percent of the digital music market in the U.S., upstart streaming services like MySpace Music and Spotify have begun to whittle away at Apple’s consumer base in the last year.

According to Reuters, an anonymous industry insider says that the company is exploring new avenues to expand the functions of its iTunes service beyond the realm of simply downloading songs.

“Apple recognizes that the model is going to evolve into a streaming one and this could probably propel iTunes to the next level,” said the unnamed source.

With a user-friendly interface and an eclectic catalog of more than 11 million songs, iTunes has attracted millions of loyal customers and sold billions of tracks since it opened its digital doors for business in 2003.

Lala’s business model allows users to have a one-time free listen to any track in its 8 million-song-strong repertoire.  Additional streams can then be purchased for 10 cents a listen or entire MP3 downloads for 79 cents and up.

With about 100,000 customers, Lala founder Bill Nguyen said in October that his company’s total revenues were just under $10 million.

Shorty before the Apple buyout, Google Inc also teamed up with Lala to offer users sample songs that came complete with links to purchase the music.

The Wall Street Journal speculated on Saturday that Apple may attempt to adapt Lala’s sales model and technology into a subscription service of some kind.

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