Thursday, December 10, 2009, 08:00 pm

Apple beat Google to Lala deal after failed bid for AdMob - report

By Brian Garner

Google was in serous discussions with music streaming service Lala before it was sold to Apple earlier this month.

Google and Apple have been battling to purchase some of the same companies in an attempt to gain leverage in the highly competitive tech sector. According to the Wall Street Journal, Google had been in serious talks with online music streaming company La La Media Inc. before Apple closed the $85 million deal earlier this month.

In November, Google purchased mobile advertiser AdMob Inc. for $750 million in a deal that trumped Apple's rumored attempts at acquiring the company. The Wall Street Journal's sources indicate Apple wanted to acquire AdMob as a defensive tactic to keep Google from obtaining inside knowledge about the workings of the App Store.

Both companies find themselves growing in ways that have begun to overlap with each other, creating competition where none had existed before. As Google has branched out from search to become a player in the mobile, desktop, and media arenas - Apple has grown from a hardware and software company into a content provider and mobile powerhouse.

The companies have become so competitive that Google's CEO Eric Schmidt resigned from Apple's Board of Directors in August. At that time Apple CEO Steve Jobs commented, "Unfortunately, as Google enters more of Apple's core businesses, with Android and now Chrome OS, Eric's effectiveness as an Apple Board member will be significantly diminished since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest."

Both Google and Apple are awash in cash, with $22 and $34 billion respectively, meaning that both have the resources to continue to compete over promising new technologies and companies that would bolster their positions in the market.

The WSJ reports, "More acquisitions could be in the works as Silicon Valley deal making heats up overall. As the worst of the recession appears to have passed, tech companies are eager to pick up promising technologies before prices climb."