Google is reportedly planning to buy music streaming service Songza for $15 million in a bid to strengthen its presence in the music sector.
Google, the biggest internet search provider, is looking to grow further and beyond its current entertainment portfolio by snapping up an established music streaming service Songza. The acquisition talks were first reported by the New York Post Friday, citing two sources familiar with the proceedings of the deal. Google CEO Larry Page is reportedly willing to bid as much as $15 million for the 6-year-old music curator and streaming service.
Songza is a free music streaming service that offers playlists based on what people are doing while listening to music. The service is different from other companies, which curate lists of songs based on a subscriber's choice of an artist and genre. The company's homepage has listed some suggestions for playlists like "working in an office," or boosting your energy." Launched in 2010, Songza has a strong user base of 5.5 million active users.
Google's interest in Songza can be due to two reasons. The music streaming service can help boost Google's struggling Google Play Music All Access subscription service, which costs $9.99 per month, and also play an important role in shaping up the rumored standalone YouTube music service, which was reported late last year. Another possible reason for Google to acquire Songza could be its valuation that is significantly lower than the competing music streaming companies like Pandora and Spotify, which are valued at $5 billion and $4 billion respectively, The Post adds.
Google's $15 million offer for Songza is justified by the small user base that the Long Island-based company offers compared to Pandora's more than 75 million listeners and Spotify's 10 million paying customers out of its 40 million user base. The move could also be an answer to Apple's acquisition of Beats Music for $3 billion, so Google gives a head-to-head competition to its rival in all categories.
As a company, Songza has raised $6.7 million in funding from Amazon, Metamorphic Ventures, Lerer Ventures and from Gary Vaynerchuk, Lady Gaga's manager, Justin Bieber's manager Scooter Braun and music startup investor Troy Carter, Venture Beat reports.
