>One person with knowledge of the deal, but who was not authorized to discuss it, said that the negotiations originated when Lala executives concluded that their prospects for turning a profit in the short term were dim and initiated discussions with Eddy Cue, Apple’s vice president in charge of iTunes.
Lala started at least five years ago. They received $35 million in venture capital. They were bought by Apple for $17 million. They had $14 million in cash. The effective price was $3 million. They were burning through $500,000 a month. I think it's pretty safe to say that now a team has explored this dark cave and found a gigantic killer bear, no one else will be stupid enough to follow. If they do, I don't know if they'll find too many VCs who want to throw away their money.
I have to think that it is a pretty big PITA (and cost) to get the proper licenses to sell a library as large as the one Lala had online.
That said, I would love it if someone did step up. I have looked at a few similar services, but haven't found any that make for an adequate replacement.
I actually prefer mog.com. It doesn't have all the same social networking features, but those weren't the draw for me anyway. It's certainly a much better bargain.
