Apple's Lala Shutdown Could Affect Google Rivalry

Apple plans to shut down Lala, the online streaming music service, on May 31. After Apple acquired Lala Media in December 2009, speculation was rampant that Apple would incorporate Lala's streaming technology into its iTunes service; nonetheless, both Lala and Apple remained tight-lipped about any future dispensation of the company's assets.

Lala allowed users, in exchange for 10 cents, to stream a particular song as many times as they liked; additionally, the Website featured songs and albums for purchase and downloading.

"Lala is shutting down," read a note on the Website's homepage April 30. "The Lala service will be shut down on May 31, 2010. Unfortunately, we are no longer accepting new users." Users who purchased Lala Web songs will be given credit in the iTunes store for the amount they spent.

In December, Lala Media found itself a chess piece in a brief game of acquisitions between Apple and Google. First Google attempted to purchase the music service, before Apple acquired it for $85 million; meanwhile, Google managed to thwart Apple's designs on mobile display ad company AdMob with a $750 million buyout.

Google's music search service, Google Music, had partnered with Lala, as well as MySpace and a variety of music labels, to let users search for millions of songs via the Google search engine. When the user entered a song or album title or artist, Google Music offered up links with audio previews from those partners. While not presenting a direct challenge to Apple's iTunes, Google Music's model suggested the beginnings of a streaming audio service that, with a few more tweaks or additions, could have become the kernel of a robust alternative.

The question is whether Google will seek to replace Lala as a partner, or if Apple has reached some agreement with the search engine giant to continue to provide music results, possibly through an iTunes-branded service.

Apple's rivalry with Google extends into multiple areas. Perhaps prime among them, given the increasing prevalence of smartphones as both consumer and business items, is Google Android versus the iPhone OS. Although backers of Android have claimed that the Linux-based operating system has advantages over Apple's offering, the upcoming iPhone OS 4 attempts to address many of those criticisms with new features, including the ability to multitask. The iPhone OS 4 also includes a mobile-application advertising platform, iAd, which seeks to monetize applications in a way similar to how Google Ads rely on the Web.

Apple has escalated the mobile conflict with Google by suing HTC, which makes a variety of popular Android-based smartphones such as the HTC Incredible and Nexus One, for supposed copyright infringement. While the iPhone OS holds a comfortable lead in the U.S. market over Android, the latter has been decidedly gaining in recent months as more devices arrive on the market.

Another area of possible contention is tablet PCs. Although Apple came out of the gate strong in this area with its April 3 release of the iPad, which sold 500,000 units within its first few days of release, rumors abound that tablets running a Google operating system will make an appearance by the end of 2010.