How Steve Jobs Buys a Company and Why Apple Bought Lala

[MacRumors]

Aubrey Johnson, a former Color employee, shares two stories behind the scenes at Apple's acquisitions of both Color and Lala -- both firms were founded by Bill Nguyen before being acquired by Apple for two very different reasons.

Like Pandora, Lala's music was streamed from the internet rather than stored locally. This allowed users to listen to a catalog of over 7 million songs for free as a stream over the web -- much like Pandora or Spotify today. Songs could also be purchased and downloaded, typically for a lower price than iTunes was offering.

Johnson writes that Lala's biggest strength was that it was at or near the top for many Google searches of particular songs, thanks to a search placement deal with Google. As a result, the firm was siphoning sales away from iTunes. As well, Google and Lala had partnered on Google's Music service. Both Nokia and Google made lowball offers for the firm, and Nguyen headed to Apple to see if they'd be interested in buying his company.

In late November [2009], Nguyen was seated at the dinner table in Steve Job's home on Waverly St in Palo Alto. Also present were Eddy Cue and Tim Cook and other Apple executives. Steve led the conversation while eating a beet salad:

"I'm going to give you a number, Bill, and if you like it, let's do it and just be done with this whole thing. Okay?" Bill agreed.

Jobs passed a piece of paper to Nguyen and Bill nodded. The deal was done.

After the acquisition, a number of Lala employees left the company with Nguyen, leaving millions in options on the table. Later, Apple apparently bought back some of those same engineers when the company purchased the remnants of Color, getting more experienced personnel for a significant savings.

Update: Johnson's post has been removed.

Article Link: How Steve Jobs Buys a Company and Why Apple Bought Lala

[tevion5]

Now all they have to do is apply the same tactics again and acquire Google

[Squilly]

I really want to know how much they were bought out for.
Got my answer. http://techcrunch.com/2009/12/07/lal...ot-80-million/

[samcraig]

Originally Posted by tevion5

Now all they have to do is apply the same tactics again and acquire Google

Why would you want them to? And what makes you think there's any chance they could remotely afford to?

[Squilly]

Originally Posted by tevion5

Now all they have to do is apply the same tactics again and acquire Google

Chances are Google has more revenue & profits than Apple. They have a search engine, Android, RELIABLE Maps, etc.

[abhishake]

Nice.

----------

Originally Posted by Squilly

Chances are Google has more revenue & profits than Apple. They have a search engine, Android, RELIABLE Maps, etc.

This is false... There's a reason AAPL (~468 bln) is more than 2x the size of GOOG (~231 bln).

[vvebsta]

Like a BOSS!! Only Steve Jobs

[sdilley14]

Originally Posted by vvebsta

Like a BOSS!! Only Steve Jobs

LOL, that was going to be my comment!

[iRCL]

This is the kind of article people want to read. Nice

[SandboxGeneral]

Now if all business transactions were that simple, life would be so much better.

[Squilly]

Originally Posted by abhishake

Nice.

----------



This is false... There's a reason AAPL (~468 bln) is more than 2x the size of GOOG (~231 bln).

Oh please... Without Google, Apple is nothing.

[nepalisherpa]

Originally Posted by tevion5

Now all they have to do is apply the same tactics again and acquire Google

Good luck with that!

[basesloaded190]

Originally Posted by Squilly

Oh please... Without Google, Apple is nothing.

And vice versa

[Yujenisis]

Originally Posted by Squilly

Oh please... Without Google, Apple is nothing.

Please explain.

I agree that without Google the Internet would be a very different, and arguably less useful place. Google revolutionized search and forced every other player to adapt or die.

Anyone else remember the smattering of search engines one used to employ for different types of searches before Google came along and changed everything? I do.

Still, I can't really see how a Google-less world would have any significant effect on Apple. Well, except without Google Microsoft might still be relevant and Apple fanboys would still be fighting Microsoft fanboys...

[nep61]

Originally Posted by SandboxGeneral

Now if all business transactions were that simple, life would be so much better.

If Steve were alive, he'd be invited to sit with Obama to figure a way out of the Finacial mess this country is in..... He maybe couldn't fix it right away, but there would be some unique ideas thrown out there, I'd bet !

[budselectjr]

Originally Posted by abhishake

Nice.

----------



This is false... There's a reason AAPL (~468 bln) is more than 2x the size of GOOG (~231 bln).

becasue AAPL has 3x the amount of outstanding shares compaired to goog?

[MMOTotal]

Just like that.. no fuss no mess. Here is a a number, take it or leave it.

[Squilly]

Originally Posted by Yujenisis

Please explain.

I agree that without Google the Internet would be a very different, and arguably less useful place. Google revolutionized search and forced every other player to adapt or die.

Anyone else remember the smattering of search engines one used to employ for different types of searches before Google came along and changed everything? I do.

Still, I can't really see how a Google-less world would have any significant effect on Apple. Well, except without Google Microsoft might still be relevant and Apple fanboys would still be fighting Microsoft fanboys...

I think you just answered your own question.

[HishamAkhtar]

Tips on how Steve Jobs bought a company:

1) He made an offer
2) It was accepted

For bonus points, pass the offer on a piece of paper for added oomph.

[nwcs]

Originally Posted by budselectjr

becasue AAPL has 3x the amount of outstanding shares compaired to goog?

Non sequitur. Outstanding shares doesn't affect market cap.

[12dylan34]

I always thought that the whole "write a number on a piece of paper" thing was just in movies. I guess that it reduces the shock of saying a huge number out loud?

[nickcliborne]

Originally Posted by budselectjr

becasue AAPL has 3x the amount of outstanding shares compaired to goog?

Stop now you're making yourself look foolish

[Chupa Chupa]

How is this unique to Steve Jobs? The Robber Barrons bought competition to shut them down back in the early 20th cent.

[SockRolid]

Originally Posted by MacRumors

... Lala's biggest strength was that it was at or near the top for many Google searches of particular songs, thanks to a search placement deal with Google. As a result, the firm was siphoning sales away from iTunes. ...

What Google said: "Don't be evil."

What Google did: "Don't be evil. Unless we get paid."

[Yujenisis]

Originally Posted by Squilly

I think you just answered your own question.

And what part of my answer leads to the conclusion that Apple would be "nothing" - just because its perceived enemy is different?