Google, Apple Buying Startups to Thwart Each Other

 
 
By Clint Boulton  |  Posted 2009-12-12 Email Print this article Print
 
 
 
 
 
 
 

Google and Apple have gone from friends battling Microsoft to frenemies. From mobile phones and applications to handset and computer operating systems, Google and Apple find themselves increasingly competing. Google tried to buy digital music provider Lala Media before Apple acquired it for $85 million last week. Meanwhile, Apple allegedly tried to buy mobile display ad specialist AdMob before Google settled on it for $750 million, according to the Wall Street Journal. The competitive fronts have crystallized, industry analyst Rob Enderle agreed.

Almost no one following high tech will disagree that Google and Apple's relationship has evolved from friends to frenemies.

The evidence to support the companies' increasing competition is overwhelming, from Apple's rejection of Google Voice and Google CEO Eric Schmidt's dismissal from Apple's board.

Now the Wall Street Journal has reported (paywall warning) that Google and Apple are trying to buy some of the same companies to keep the other from acquiring them.

Specifically, Google tried to buy digital music provider Lala Media before Apple acquired it for $85 million last week. Meanwhile, Apple allegedly tried to buy mobile display ad specialist AdMob before Google settled on it for $750 million.

A few years ago, no one might have guessed that Google would go for a streaming music provider like Lala.

But Google's mission is to organize the world's information online to render it easily findable to consumers, and the company recently added a music search service, Google Music, which includes Lala as a partner. Perhaps Google believes owning Lala would give it a nice alternative to Apple's iTunes music store.

For Apple, AdMob would mark a strategy shift into online advertising, where Apple is absent. But AdMob rose to power offering ads within iPhone applications and houses a lot of data about iPhone apps and the iPhone App Store that could be very useful to Google. Ian Schafer, CEO of marketing agency Deep Focus, said:

"If Google is taking on Apple for mobile OS market share, they just scored a huge competitive advantage. Google will know more details than ever about how people are using iPhone apps, how they are engaging with advertising within those apps, and users' loyalty to those apps."

Accordingly, the Journal said Apple eyed AdMob as a defensive maneuver. Enderle Group analyst Rob Enderle noted:

"Streaming is increasingly seen as the future of media, and while there are third-party apps that support it, Apple as a company hasn't. Google is building an empire of advertising-funded media, and streaming is the best way to build out this model with this type of media. Google is about advertising, and AdMob is consistent with a core competency. Apple gets virtually no revenue from advertising, and that is a huge pool Apple doesn't play in."



 
 
 
 
 
 
 
 
 
 
 

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