Furious speculation on Friday evening has seemingly culminated in Apple striking a deal to buy streaming music firm Lala. Reuters, the Wall Street Journal and All Things Digital are reporting it as a done deal, although Apple has not officially announced the acquisition or its intentions. “Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plan,” says spokesperson Steve Dowling.
So what is the thinking behind the deal, which follows MySpace’s acquisition of iLike and Imeem in recent months? That could be one reason: Apple reacting to MySpace’s increased focus on music and media, rather than its social networking battle with Facebook. Meanwhile, one source tells Reuters it’s a sign of Apple’s intention to add streaming capabilities to iTunes. “Apple recognizes that the model is going to evolve into a streaming one and this could probably propel iTunes to the next level,” says the source.
Lala doesn’t have a huge customer base – about 100,000 users – so it’s pretty clear that technology and deals are the keys here. It recently signed deals with Google and Facebook to provide, respectively, music search results and music as virtual gifts. Lala is also developing an iPhone app – it’ll be interesting to see what happens to that now, and indeed to Apple’s current policy of allowing streaming music services to launch apps for its iPhone and iPod touch.

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