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Parties continue to dispute worth of Lala deal

updated 10:05 am EST, Tue December 8, 2009

Company worth only a fraction of previous claim?

The true price paid for Apple's purchase of Lala continues to be in dispute, a new report suggests. Sources reached by AllThingsDigital recently put the value at $80 million, conflicting with early indications that Lala was acquired at a "fire-sale" cost. TechCrunch's Michael Arrington, however, cites "sources with indirect knowledge of the deal" as claiming a value of just $17 million, a far cry from the $180 million or more the company was thought to be worth in 2008.

Lala is moreover said to have had $14 million in cash at the time of acquisition, rather than $10 million, meaning that Apple's real expenses were only $3 million.

Arrington proposes that misunderstanding may come from talk of the price ranging between 40 to 50 cents on the dollar, which some may have interpreted as referring to the $180 million valuation. The truth, Arrington argues, is that that the number is based on the $35 million raised in actual venture capital funding.

Music industry insider Bob Lefsetz meanwhile proposes that Apple is not interested in the technology already developed by Lala, but rather the company's workers. A source with direct Apple access is quoted as saying that Eddy Cue, Apple's VP for iTunes, is "way more interested in a couple of key men (developers) than the existing IP," and that Apple as a whole is "not primarily buying tech this time." Speculation has held that Apple will use Lala's assets to allow streaming iTunes content via the web, or other platforms.




by MacNN Staff

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Comments

  1. climacs

    Joined: Dec 1969

    +1

    so basically

    how it went down may have been something like this:

    "Lala, sell to us at a firesale price or we will hire away your two key employees. We are aware they have contracts and you are perfectly entitled to attempt to enforce those contract terms and any NDA they may have signed. See you in court. Oh, by the way, our legal department's annual budget is much more than what we are offering you. Just a thought for you to consider."

    Just a wild-a** guess. Could be wrong.

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