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Wednesday, December 09, 2009, 09:00 pm PT (12:00 am ET)

WSJ: Apple's $85M purchase of Lala paves way for iTunes cloud

Apple's purchase of music streaming service Lala signals a fundamental change in the way that the company will present iTunes content on the web.

Apple is poised to totally change its iTunes business model with a increased focus on Internet-based content, reports the Wall Street Journal in an article appearing in Thursday's edition. Using newly acquired La La Media Inc. as a springboard, Apple is considering to adopt a usage model that would allow consumers to access and manage their iTunes purchases directly through the Internet without downloading the content in question or the iTunes software.

In its current form, iTunes requires users to download and manage their iTunes purchases on a per-computer basis. With a new focus on Internet-based management, an iTunes user could log into their account and access and stream all their music from any computer with an Internet connection. This technology could also allow Apple to sell music on other websites or even in web-based search results.

Apple has already made some small strides into web-based iTunes functionality with the release of iTunes Preview in November. With iTunes Preview, users can share music links via iTunes without the need to launch Apple's media suite. Previously, users without iTunes were prompted to install the software in order to view content.

The Wall Street Journal's figure of $85 million for Lala's purchase price is in the same ballpark of what Peter Kafka at AllThingsDigital reported Monday. The report also confirms what Maynard Um predicted about Apple's reasons for aquiring Lala earlier this week.

Lala execs have already assumed important roles in shaping Apple's iTunes strategy going forward. "It's our understanding that the Lala guys are going to be in very significant roles," someone familiar with Apple's plans reportedly said.

Apple's $1 billion server farm project planned for North Carolina may actually be tied to this web-based strategy, and could provide the backbone for a web-based iTunes.

According to the Journal, Apple could begin to make these changes as early as next year.