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Reports confirm Apple reaches agreement to purchase Lala

Sources inside Apple have confirmed that Apple has agreed to buy Lala, an online music streaming service based in Palo Alto, California.

Confirming earlier reports, sources inside Apple have confirmed that it has indeed acquired music streaming service Lala. The specific terms of the deal have not been released as of Friday evening.

According to reports by the New York Times, Lala had actively sought out Apple after Lala executives concluded that prospects for turning a profit in the short term were slim.

Lala allows its users to stream any song in its 8 million strong song library once, with the option for unlimited streaming at 10 cents per track and 79 cents for permanent MP3 download.

This acquisition would allow Apple to integrate full-song streaming into iTunes and opens up possibilities for Pandora-like streaming radio on anything that can run iTunes, including the iPhone, iPod Touch, and Mac systems.

In October, Lala, along with iLike, entered a partnership with Google to allow users to quickly discover song previews, artist info, pictures, video and more. Currently, Google searches for artists or songs can return a full, streaming, embedded song at the top of results, courtesy of Lala.

According to the AP, Lala founder Bill Nguyen had demonstrated an iPhone app in October which would have allowed users to buy streaming rights to a song for 10 cents each. Using "intelligent caching," it allowed tracks to load in seconds and allowed playback even in areas without cell phone coverage. This app was never released to the public.

Apple has a large war chest of nearly $31.1 billion in cash and investments, giving it the largest net-cash sum of any technology company.