Apple close to acquiring music streaming service Lala - report
Apple currently in "advanced" acquisition negotiations with the music streaming Web site Lala, as part of a deal that could bring full streaming songs to iTunes.
Citing two anonymous sources with knowledge of the discussions, CNet reported Friday afternoon that an agreement between the two parties could be imminent. Parties with both companies declined to comment.
"Exactly what Apple intends to do with Lala remains unclear, but it would appear that Apple intends to offer some kind of streaming service to iTunes users," the report said. "Right now, Apple is the largest music store online or offline and Apple has made more money than any other music service by selling music downloads."
Weeks before its $750 million acquisition by Google, Apple reportedly met with mobile ad service AdMob. The nature and extent of those discussions remains unknown.
Apple has been described as awash in cash as it has accrued a massive $31.1 billion in cash and investments. That number, up 27 percent from a year prior as of August, is the largest net-cash sum of any technology company.
Citing two anonymous sources with knowledge of the discussions, CNet reported Friday afternoon that an agreement between the two parties could be imminent. Parties with both companies declined to comment.
"Exactly what Apple intends to do with Lala remains unclear, but it would appear that Apple intends to offer some kind of streaming service to iTunes users," the report said. "Right now, Apple is the largest music store online or offline and Apple has made more money than any other music service by selling music downloads."
Weeks before its $750 million acquisition by Google, Apple reportedly met with mobile ad service AdMob. The nature and extent of those discussions remains unknown.
Apple has been described as awash in cash as it has accrued a massive $31.1 billion in cash and investments. That number, up 27 percent from a year prior as of August, is the largest net-cash sum of any technology company.
Comments
I just signed up for LaLa.com after reading about this news regarding Apple today, and I'm quite impressed!
The pressure will be on soon for them to start paying a dividend, unless they can prove that they can exercise their balance sheet a bit more and drive higher growth.
It's not that they're not doing wonderfully - they are - but they're making so much profit and just letting it sit in the bank, that at some point they're going to need to return it to the shareholders as a dividend. Unless they've got better ideas of what to do with it.
I hope they have better ideas of what to do with it!
Seriously, $31b is an embarrassing amount of cash for a company Apple's size, with no debt and high margins.
The pressure will be on soon for them to start paying a dividend, unless they can prove that they can exercise their balance sheet a bit more and drive higher growth.
It's not that they're not doing wonderfully - they are - but they're making so much profit and just letting it sit in the bank, that at some point they're going to need to return it to the shareholders as a dividend. Unless they've got better ideas of what to do with it.
I hope they have better ideas of what to do with it!
Technically it is not just sitting in the bank. Apple set up a shell company called Braeburn something something. It is a front for "investments", money laundering and such.
Seriously, $31b is an embarrassing amount of cash for a company Apple's size, with no debt and high margins.
The pressure will be on soon for them to start paying a dividend, unless they can prove that they can exercise their balance sheet a bit more and drive higher growth.
It's not that they're not doing wonderfully - they are - but they're making so much profit and just letting it sit in the bank, that at some point they're going to need to return it to the shareholders as a dividend. Unless they've got better ideas of what to do with it.
I hope they have better ideas of what to do with it!
Agreed, and not to sound flippant bc you make a very good point, but my bet is that Apple has a few more 'better ideas!'
Seriously, $31b is an embarrassing amount of cash for a company Apple's size, with no debt and high margins.
The pressure will be on soon for them to start paying a dividend, unless they can prove that they can exercise their balance sheet a bit more and drive higher growth.
It's not that they're not doing wonderfully - they are - but they're making so much profit and just letting it sit in the bank, that at some point they're going to need to return it to the shareholders as a dividend. Unless they've got better ideas of what to do with it.
I hope they have better ideas of what to do with it!
Well, this is also the same company that was nearly out of cash in the mid 90s. A few people (Steve) probably remember that.
But you're right. Up until now, Apple's strategy has been smaller acquisitions that have the potential of many multiples of return for their investment. They could certainly make a big play with their cash right now (Adobe, heck even Dell) but neither would be a good long term investment for Apple's space. A dividend might be the only way to make the Street happy long term.
And keep in mind that Apple was a dividend company back in the 1980s. They eliminated the dividend to save cash as their fortunes soured in the 90s.
Seriously, $31b is an embarrassing amount of cash for a company Apple's size, with no debt and high margins.
The pressure will be on soon for them to start paying a dividend, unless they can prove that they can exercise their balance sheet a bit more and drive higher growth.
For Apple to succumb to that pressure would be dumb, and that, they are not. Perhaps a one-time 'special' dividend, or a massive share repurchase would be OK, but to initiate a regular dividend payout could have disastrous signaling consequences.
Seriously, $31b is an embarrassing amount of cash for a company Apple's size, with no debt and high margins.
The pressure will be on soon for them to start paying a dividend, unless they can prove that they can exercise their balance sheet a bit more and drive higher growth.
It's not that they're not doing wonderfully - they are - but they're making so much profit and just letting it sit in the bank, that at some point they're going to need to return it to the shareholders as a dividend. Unless they've got better ideas of what to do with it.
I hope they have better ideas of what to do with it!
Someone hasn't been following Apple for very long, apparently.
Either that, or they don't know how certain innovative companies lead the pack and stay one step (or so many more) ahead of their competitors. Don't count on Apple to pay dividends.
I'd like to see them do something more significant with all that cash they are sitting on.
Why? What are they not doing now that they should be?
The Zuning of the iPod?
Think how many matte screens you could buy with $31 billion or how many flash units you could buy to help the iPhone camera?
An acquisition by Apple like this is interesting. From a technological standpoint, I doubt LaLa has anything Apple couldn't build on their own.
I agree. But since 90% of the work is already done for them maybe they just don't have the resources to build something like LaLa quickly enough. They're too busy working on 10.7 Clouded Leopard... which is starting to take shape when you consider this purchase, the datacenter in NC, MobileMe, etc...
I agree. But since 90% of the work is already done for them maybe they just don't have the resources to build something like LaLa quickly enough. They're too busy working on 10.7 Clouded Leopard... which is starting to take shape when you consider this purchase, the datacenter in NC, MobileMe, etc...
Or, they're also preempting yet another IP lawsuit that will arrive down the road if they 'made' rather than 'bought.'
Seriously, $31b is an embarrassing amount of cash for a company Apple's size, with no debt and high margins.
Embarrassing? You?re right it?s so much less humiliating to be hemorrhaging money and running into the red constantly. If being successful and pragmatic is embarrassing colour me embarrassed.
First of all, $31B isn?t really that much. Didn?t Apple paid out a half billion earlier this year for NAND from Samsung and another huge lump sum for LCD screen for LG? All for future products. This gets them good component rates. You can?t do that if you have supply them an IOU or wonder if you do pay them what you?ll have to do to be able to pay your other bills.
As a stock holder I appreciate a company that isn?t acting like someone living week-to-week spending all their money as soon as they get it. With the volatility of the market?especially with tech stocks?having a huge financial anchor to weather the storm is a good thing for stock holders. Frak some silly dividend. Any one getting into Apple knows not to expect them or tey shouldn?t be trading in the market.
Also, MS had a reported $51B at one time, if I remember correctly, and they may have had a smaller market cap than Apple has now. That amount has been decreasing each year and is lower than Apple?s.
MIcrosoft offered a dividend. The stock has been stagnant ever since.
Seriously, $31b is an embarrassing amount of cash for a company Apple's size, with no debt and high margins.
The pressure will be on soon for them to start paying a dividend, unless they can prove that they can exercise their balance sheet a bit more and drive higher growth.
It's not that they're not doing wonderfully - they are - but they're making so much profit and just letting it sit in the bank, that at some point they're going to need to return it to the shareholders as a dividend. Unless they've got better ideas of what to do with it.
I hope they have better ideas of what to do with it!
The pressure has been on Apple to pay dividends for years. It, however, is not going to happen. Apple remembers the lean years. Having that cash allows it to keep innovating in a down economy. It also would allow it to weather a decline in sales. It also uses that cash stock pile to make large advance purchases of supplies like Flash memory, and acquire small innovative companies. Further, there is freedom in not having to worry about paying the bills.
MIcrosoft offered a dividend. The stock has been stagnant ever since.
I don?t get how some people?even longtime investors?think dividends are ?free? money.
For Apple to succumb to that pressure would be dumb, and that, they are not. Perhaps a one-time 'special' dividend, or a massive share repurchase would be OK, but to initiate a regular dividend payout could have disastrous signaling consequences.
Exactly. The whole concept of a dividend is stupid and just creates a drag on the companies finances.
I think Apple is just taking a stand here, as they do on a lot of things and saying that they don't believe in dividends, period. They just suck capital out of the company for no good reason. Sort of like executive bonuses.