Remember when Apple bought Lala? The small startup music streaming company? Well, today, a former Color employee opened up about how that acquisition went down. If you aren’t sure on what Lala was, it was a service much like that of Pandora or Spotify, where users would stream rather than store their music, and in a new blog post by the former Color employee Aubrey Johnson, titled “Twice”, the former designer from another company bought buy Apple describes how the acquisition was conducted.
A surprising find in the post is that Apple didn’t buy Lala mainly for the streaming technology, but the Google Search placement. Lala was taking sales away from iTunes through a partnership to have its results near the top of Google search results. Nokia and Google both went to Lala before the CEO, Bill Nguyen, went to Apple asking if it would like to buy Lala instead:
He called in a few favors and got a meeting with the leadership at Apple. He explained that he had offers from the largest mobile OS competitors and that they wanted to acquire his music startup. Cue knew if Google obtained Lala the ownership of the service coupled with search dominance could be disruptive to their stronghold. Bill was notorious at getting great deals with the music elite, usually through Lala’s investor, Warner Brothers Music.
In late November, Nguyen was seated at the dinner table in Steve Job’s home on Waverly St in Palo Alto. Also present were Eddy Cue and Tim Cook and other Apple executives. Steve led the conversation while eating a beet salad:
“I’m going to give you a number, Bill, and if you like it, let’s do it and just be done with this whole thing. Okay?” Bill agreed.
That slip of paper had $160 million written on it. That in comparison to Nokia’s offer of $11 million was a ton of money. Half of that would be paid in cash and stock while the other half would go to bonuses for those employees who decided to stay. The ironic part is that many left Lala to go on to the former CEO’s next creation, which became Color, which Apple also bought out later. So either way, Apple got the engineers that were involved, and even for a cheaper price.
What do you think? Interesting to hear how that went down? Wonder why Johnson just now opened up? Let us know in the comments, or tweet me @TiP_Kyle.