10 Reasons Why Apple's Lala Buy Could Bring Online Success

By Don Reisinger  |  Posted 2009-12-07

10 Reasons Why Apple's Lala Buy Could Bring Online Success

Apple's successes in the hardware and software space is well known and often discussed. But in an acquisition of music-streaming service Lala, the company has done something that many folks thought it wouldn't: it has silently moved into the online space. Admittedly, it's a small first step. Lala doesn't have the following that Pandora or Rhapsody do. The site is probably known to very few people outside main tech circles. It just doesn't have the "household name" that some of its competitors do.

But that's not the real story today. The real story of Apple's acquisition of Lala, which the company confirmed on Dec. 4, starts with Apple. The hardware company that has stayed true to its roots is now branching out of its comfort zone to engage other, prominent companies on the Web. Of course, Lala might become an important component in Apple's hardware strategy. But it's now an important component in its Web strategy. That's why we need to evaluate Apple as an online company. Can it attract more users? Can it be successful?

I believe that it can. And here's why:

1. Apple understands the consumer

If nothing else, Apple fully understands the needs and desires of the consumer. It has proven that with the hardware it sells. It has shown that with the software it offers. To believe that it wouldn't do the same for any online endeavor is ludicrous. Reality is, Apple "gets" what people want. And that will help it with any strategy it pursues online.

2. Music is what Apple knows

Apple's Lala acquisition makes a lot of sense. The company's iPod proves that better than just about anything else the company offers. Apple has shown time and again that music is an integral part of its strategy. By making a streaming-music service another component in that, it would only seem that Apple can do great things online.

3. Mobile integration

Perhaps one of the biggest benefits of pursuing an online strategy is the ability to integrate the streaming into the company's mobile devices. Apple could quite easily integrate Lala or any other online service into the iPhone or the many iPods it sells. It would give users the option of either listening to their own music, downloading apps, or listening to various songs that stream directly to their devices. With the Lala acquisition, Apple could up the mobile ante.

4. Mac OS X integration

An online strategy might also help Apple improve Mac OS X. Right now, there isn't a single operating system on the market that comes bundled with useful online services. Lala is just the first step of many that could vastly improve Mac OS X. Imagine a new Mac OS X with a Lala option right in the Finder. It might also have other online properties Apple acquires at some point in the future. It could be Apple's way of competing against Chrome OS.

5. Apple has a vision

With the Lala acquisition, Apple has proven that it has a real plan for its future online. Apple's acquisition of Lala seems awfully strategic in nature. The company could have picked up a bigger brand for a little more cash, but it picked Lala. It must have a clear vision of what it wants and where it wants to go with Lala. It should be fun to watch.

The Web Is the Future

6. The Web is the future

I think Apple understands that the future of the OS business and perhaps every facet of its operation, is online. Because of that, the company is slowly but surely acquiring companies that bring that sense of Web life to its own services. Of course, Lala won't be the first step in that process, but you can bet that it will be one of many. Apple sees the writing on the wall. And the Lala acquisition reflects that.

7. It has clout

Getting into the music-streaming business can be risky. The online companies that offer those services have been in a non-stop battle with prominent record labels. But they all lacked something that Apple has: clout. Record labels can easily pick on a company like Lala because it's small and it doesn't have much cash. But Apple is an entirely different company. And it already has strong ties with the record labels. That should significantly improve Lala's chances going forward.

8. It has cash

As Apple follows an online strategy, it's also important to note that the company has cash. Bundles of cash. Any company on the Web that it thinks will improve its offering can be acquired without much trouble. And if it feels that a competitor is gaining too much share in one sector or another, it can easily acquire another company in that space. Simply put, Apple has the cash to do whatever it want on the Web.

9. Apple doesn't want to be Google

Unlike Microsoft, Apple has no plans to take on Google online. That's a smart move. Google owns the Web's best profit centers. It has also cornered the market in those sectors. To try and compete with Google wouldn't make much sense. That realization should help Apple be far more successful than if it attempted to beat Google.

10. People know and trust Apple

Perhaps most importantly, Apple is a known and trusted brand on the Web. The company isn't just another no-name firm that people are suspect of. Apple is a household name that users trust more than many others. That's an important first step on the Web. And it's one that Apple has already taken.

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