Apple Reportedly In Talks To Acquire Lala

Bloomberg is reporting that Apple is “in talks to acquire online music service Lala, according to two people familiar with the matter.”

The shoe fits. Back when Lala launched I described it as an iTunes in the cloud — something that we believe Apple will inevitably launch. Apple is certainly building a lot of data center capacity for something. Lala is already one of two companies powering full-song streaming for Google’s new music search (the other one is MySpace Music via its iLike acquisition), and it is a part of the Facebook gift shop. Lala already has all the streaming licenses in place with the major music companies and a team which can help Apple create a killer streaming version of iTunes.

We’ve been huge fans of Lala since its launch in October (you can see our extensive coverage here. The site uses an innovative ‘web song’ model that lets you buy albums for very cheap (10 cents per song) that you can then stream as many times as you’d like. That pay-to-stream model would certainly be more attractive to Apple than just an advertising-supported one. Lala’s streaming licenses might also allow iTunes to deliver a full-song sample instead of the 30-second previews currently available.

Update: I walked over to the Lala office, which is only a few blocks from us, to see if I could gather any more details. They didn’t seem particularly happy to see me. I knocked on the door and a Lala employee answered, keeping the door half shut so that I couldn’t see in. I asked if any of the company’s executives were around. He looked over his shoulder, asked if they were, and a second later said they weren’t (it was not a particularly convincing effort). He promptly shut the door, and I’m pretty sure I heard someone inside say something to the effect of “Are you serious, don’t answer it!”.

Obviously this isn’t confirmation of anything, but they’re clearly on high alert.

One other point to note: back in October we did an extensive sneak preview of the long-awaited Lala iPhone app. The Lala team had previously been concerned about having their app rejected because of the way it competed with the native iTunes app, but in light of the recent acceptance of apps like Spotify they were optimistic.

It’s now been more than a month since we gave that preview. Six days ago I reached out to Lala to find out what the situation was, and, as a secondary question, to see if they had an extra spot in their iPhone beta program. CEO Geoff Ralston replied to my question about the beta, but he totally ignored my question about the iPhone app. Most CEOs in that position would have at least acknowledged that they had fallen prey to the Apple approval process.

We’re still digging for more.