If this deal happens it simply must be a purchase and not a contract. Google cannot have what would be one of the featured Android services controlled by a third-party and by nature available for sale to someone else.
At the time of the buyout by Apple, LaLa provided the featured content for the failed Google Music OneBox product. It really isn’t much of a leap to assume that one of the things that made LaLa attractive to Apple was scuttling this Google service. Google Music OneBox was growing in popularity and assumptions were made that Google wanted LaLa for themselves if they could work out a deal that allowed LaLa’s licenses with the labels to survive a buyout. Apple had no interest in LaLa’s licensing deals as they never intended to maintain LaLa’s business as a separate product.
Now, back to Spotify for a minute. Let’s say that Google announces their cloud music strategy and the logo says “powered by Spotify” down in the corner. Would it not make total sense for Apple or Amazon to call the Spotify people up and offer more billions than can be declined to buy Spotify out and shut it down?
Spotify would have a contract with Google but either Apple or Amazon would see the cost to buy Spotify and settle a breach of contract claim from Google as money well spent if it totally derailed Google music.
I’m aware that a buyout of Spotify would hinge on the deals that are signed with the labels. If a sale voids the licenses that Spotify has to stream music then a buyout won’t happen. Then again, if a buyout voids the licenses that Spotify holds to stream music this would only increase the danger of another company like Amazon, Apple or even Microsoft strolling in and cutting a deal to buy Spotify.
Given that Google was very close to a $1 billion deal last year it is reasonable to assume that those licenses would survive a buyout. Google doesn’t need Spotify’s streaming media technology, they could easily create their own storage and streaming solution.
This cannot be a handshake deal with Spotify, there are too many big name, deep pocket companies that would love nothing more than to stab Google in the chest on Google Music launch day. Google must own whatever technology is used to power Google cloud music.
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