I keep wondering when Apple
Now, Apple decided to buy something over the weekend, but it's nowhere near the multibillion-dollar splurges that everyone else is getting into. Apple plunked down an undisclosed but most certainly small pile of cash for music-streaming service Lala.com. It's similar to Apple's deal with media-processing chip company PA Semi last year -- The New York Times says the company simply wants to get its hands on the engineering talent found at Lala.
Lala's greatest claim to fame so far was the agreement to serve up free music streams to Google's updated music search functions. There's also a popular Lala application for sending musical gifts around Facebook, and there's a mobile application in the works. Lala sports a clever licensing scheme that allows you to buy songs for download at prices comparable to Apple's own iTunes, or pay a much smaller fee for the right to stream songs you own from "the cloud" on demand.
Apple should eventually put Lala's engineers to work on a streaming option within iTunes. The fixed-price iTunes model has worked well so far, but the times, they are a-changing. Services such as Hulu and YouTube have shown that streaming media works well for consumers, and now everyone is scrambling to figure out how to make it work as a business, too. Sometimes we forget that YouTube didn't even exist five years ago. What's more, streaming makes piracy walk the plank. Apple must change to keep up with customer tastes.
Of course, Apple could afford to make a much bigger bet than handing out pocket change for a few new hires. Apple has bought four companies in the past six years, according to Capital IQ, and none of those deals has been particularly large. I mean, if Apple truly wanted to kickstart a streaming service, Rhapsody parent RealNetworks
I'm not saying Apple will buy a big music-streaming service -- I'm just saying that it should. What do you think? Let me know in the comments below.
Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. The Fool owns shares of Oracle. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.
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