Google Inc. (NASDAQ: GOOG) announced yesterday that the company will be acquiring music-streaming startup business, Songza Media. The immediate details surrounding the acquisition were not available, mainly due to the fact that Songza is still a private company. Rumors have it that Google acquired the startup company for approximately $15 million.
The acquisition is currently being viewed as a strategic move from the tech giant. Pandora (NYSE: P) and Spotify, the current major music-streaming services, have both experienced increased subscribers and business recently while music downloads have been slowly decreasing. As the general population slowly transitions from downloading music to streaming music, it seems logical for Google to make the acquisition in order to increase the functional capacity of their Google Play streaming service. A similar strategic move was performed by Apple (NASDAQ: AAPL) in May when the company acquired Beats Music for $3 billion.
Both Songza and Beats Music utilize algorithms to compile playlists for their users. Each platform was developed by a competent team of developers with the objective of generating the proper playlists that would adapt with the environment and mood. Currently, it is believed that Songza possesses a more developed platform because the program takes into account more specific variables such as the time of the day, the day of the week and even as specific as the users’ current location.
The acquisition of Songza won’t make much of an impact on Google’s balance sheet, but the prospect they brought to Google’s table is beyond measure. If deemed accurate enough, the coding behind Songza could be applied to other areas beyond the music-streaming industry.