Wednesday, July 2, 2014

Google Buys Streaming-Music Service Songza

ROLFE WINKLER/The Wall Street Journal

Songza co-founder Eric Davich WireImage/Getty Images
Google Inc. said it acquired streaming service Songza Inc. in a deal that is about more than music.

Songza launched its app in 2010 and has relatively few listeners—5.5 million, compared with 75 million for Pandora Media Inc. and 40 million for both Spotify Ltd. and Apple Inc.'s iTunes Radio.

But Songza is best known for its technology that uses variables like time of day, day of the week, and a listener's location to create customized music playlists.

The companies didn't disclose a price for the deal. Google said it isn't planning any immediate changes for Songza, but will look to incorporate the company's technology into its other two music apps, Google Play Music All Access and a forthcoming YouTube music-streaming service expected to launch in the next few months.

Google is expected to integrate subscriptions to those services, according to a person familiar with the matter.

Elias Roman, Songza's chief executive, said the technology also could be used for targeted ads and book and movie recommendations. He pointed to an ad campaign on Songza for a sleeping product from Procter & Gamble Co. that runs with nighttime playlists.

"Historically the [Internet] has been about searching and browsing," said Mr. Roman. "The future isn't about people finding things, it's about things finding people."

Google is making similar moves. Its Google Now digital-personal assistant is designed to provide information to users before they ask for it, notifying them automatically that their flight is delayed, for example.

Songza hasn't moved beyond music and ads, but Google itself has been looking to improve the recommendations it provides via the Google Play store, where users of Android devices can download apps, games, movies and other content. Google views music and other content as strategically important to attract and retain users on Android devices, a former Google executive said. The person familiar with Google's plans said it would make sense for Google to incorporate Songza's technology beyond music as it seeks to provide better content recommendations. Mr. Roman said the company's 40 employees will join Google.

The Songza deal heightens the rivalry between Google and Apple, which spent $3 billion to acquire Beats Electronics LLC and its Beats Music service in May. Like Songza, Beats Music specializes in music curation. Each employs teams of human playlist makers, who compile song sets for certain moods and activities.

Songza is a free, ad-supported service while Beats Music charges a subscription fee.

Songza had raised about $7 million from investors including Lerer Ventures, Metamorphic Ventures and Deep Fork Capital.

Talks between the companies were earlier reported by the New York Post.

—Hannah Karp contributed to this article.

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