Apple is in the final stages of cutting a deal to acquire streaming music site Lala.com, according to a report by CNET's Greg Sandoval. There are few details about the reported acquisition but sources told Sandoval that the terms have already been hammered out and the only thing left to do is sign a final agreement. (Techmeme)
It would mark the third acquisition of a digital music site in recent months, with MySpace acquiring iLike in August and Imeem last month.
It's unclear what Apple would do with a service like Lala - and neither company is even confirming the deal yet - but, given Apple's presence in the digital music space and the rise of Web-connected mobile device such as the iPhone, it seems that Apple's interest in Lala would be to bring an online streaming music experience to iTunes users.
Lala, which was once a CD-swapping service, has changed its business model a couple of times in recent years. Today, Lala allows users to listen to a full version of a song as a preview (as opposed to Apple's 30-second preview clip) and then pay 10 cents for it for unlimited playback of the song over the Internet. If users want to actually purchase a DRM-free version of the song, it can be downloaded and stored on a hard drive, as well as a portable device such as the iPod or Zune, for an additional 79 cents. (That's 89 cents in total when you add in the initial 10 cents.)
I would guess that Apple would incorporate the technology into iTunes, maybe offering a free full-track preview and a low-cost version that allows for online streaming only. Eventually, Apple would want to sell you that full-priced track for playback on an iPod or iPhone.
There's also something to be said about storing music libraries in the cloud. Currently, music tracks purchased through iTunes are downloaded and stored on the purchaser's physical hard drive. But hard drives can fail and when that happens, huge investments in music purchases can disappear in a moment. This has happened to me before and it cost me a couple of hundred bucks to have my music library restored. Even then, some tracks couldn't be recovered and the metadata on many that were recovered was lost forever.
Of course, I'm just speculating about Apple might do with the Lala service. But, knowing Apple and its history, I imagine that the integrating of Lala into iTunes will bring some sort cool new value add to an already popular service.