Lala deal valued at $80 million, say sources
updated 04:10 pm EST, Mon December 7, 2009
Counters earlier 'fire-sale' rumors
Apple's Lala buyout was worth approximately $80 million, say sources contacted by AllThingsDigital. The value is less than half what the Lala was estimated to be worth in 2008, but considerably more than the company's $35 million raised to date. Apple has refused to comment, and investors Ignition Capital, Bain Capital Ventures and the Warner Music Group have not made any statements.
In March Warner is believed to have taken an $11 million write-down for a $20 million stake in Lala, which could mean that it is entitled to compensation as part of the Apple deal.
Initial rumors hinted that Lala was being bought at a "fire-sale" price, for as little as half of the contribution of investors. Sources claim however that the company had about $10 million in cash during talks, giving it a better negotiating position. Apple is also said to have been impressed by Lala's engineering talent, which had produced a streaming music service and a matching iPhone app. The app has not made it to the App Store, and will likely never be published in its original form.
