Was Google in talks to buy Spotify?

Was Google in talks to buy Spotify?

Summary: Rumours are swirling over whether Google really scrapped a plan to buy out Swedish music streaming service Spotify.

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Image: Spotify

Was Google considering buying Swedish music streaming service Spotify? It all depends on who you listen to.

According to a report in the Wall Street Journal, Google scrapped plans to buy the company late last year because the price was too high.

If the Wall Street Journal is right, a large chunk of the $30bn Google keeps offshore to fund non-US acquisitions could have been sunk into Spotify. That is, if talks between the two companies had not broken down late over the price of the deal.

While the WSJ doesn't put a figure on the proposed acquisition, it does highlight Google's disclosure in December that it "recently pursued", but subsequently scrapped, a plan buy a foreign company valued at between $4bn to $5bn. A month earlier Spotify closed a $250m funding round, reportedly valuing the company at around $4bn.

Since then, Google has also acquired Songza, a service that recommends tracks based on people's mood; Google will integrate Songza's functionality into its own music streaming services on Google Play and YouTube.

And as Recode reported on Monday, Google's new business lead Omid Kordestani joined Spotify's board while another former Google exec, Shishir Mehrotra, has become a special advisor to Spotify CEO Daniel Ek.

Given the Songza acquisition, announced earlier this month, demonstrates Google's clear interest in music streaming, and the recent addition of a number of ex-Googlers to Spotify's board, you'd be forgiven for thinking the rumours have legs. However, Recode reports that, according to its sources, there never were any talks between the companies over an acquisition — and so no discussions to break down over pricing.

However, the publication does note that Ek has met with Google to talk about "various and substantive commercial deals" potentially involving Android or YouTube. Recode also reports that Google's new head of YouTube Susan Wojcicki would like to buy Spotify if the company were up for sale. Perhaps a future union between the two isn't impossible then, and having Spotify under its belt would no doubt accelerate Google's own subscription music service All Access.

While many have doubted whether Spotify can convert its users into paying subscribers, in May the company announced it had racked up 10 million of them, amounting about a quarter of its total number of active users. That's significantly more than the hundred thousand or so that subscribe to Beats, the company Apple paid $3bn for earlier this year.

Google and Spotify did not respond to request for comment.

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Topic: Google

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • I hope not

    as they'd probably kill the apps on Windows/Windows Phone.
    grayknight