Google (GOOGL) is making a play in the music streaming business. It is buying a small relatively unknown start-up based in Long Island City, New York, called Songza, for an undisclosed sum.
However, the New York Times reports Google paid more than $39 million for the service. Songza has just about 5.5 million active users, a fraction of rivals like Pandora (P) and Spotify, each of which as tens of millions of users. Songza's technology uses factors like time of day and a listener's location to create custom playlists. The company's CEO said that technology could translate to other uses, beyond music.
“We can’t think of a more inspiring company to join in our quest to provide the perfect soundtrack for everything you do,” Songza chief executive, Elias Roman, said in a statement.
Yahoo Finance Senior Columnist Michael Santoli said Google is experimenting with many different areas and this is part of Google’s new campaign to organize information.
"Historically, the [Internet] has been about searching and browsing,” Roman said in the Wall Street Journal. "The future isn't about people finding things, it's about things finding people," he said.
Google said in a statement that it doesn’t plan on making any immediate changes to Songza, but said it is looking into integrating the service into its existing services, like Google Play Music or YouTube.
The deal comes just after Apple paid $3 billion to buy Beats Music and Beats Electronics in May. It also highlights how competition in the music streaming service space is heating up.