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Google Hopes To Expand Its Music Streaming Business by Acquiring Songza

Google wants to better compete with iTunes by getting into the music curation business.

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Google continues to diversify. It has added online Google Docs, the Android mobile device operating system and now it wants to improve its music streaming business by possibly acquiring Songza.

The world’s largest Internet search engine is trying to find ways to differentiate its music streaming service, Google Play Music All Access, which costs $9.99 per month.

Based in Long Island City New York, Songza was established six years ago and currently has about 5.5 million users of its live streaming music service.

Google has reportedly offered as much as $15 million for the company which currently lags behind major players in the industry such as, Spotify (24 million users) and Pandora (77 million users). But Google is not alone in the bidding and may need to cough up even more than $15 million if it really wants the company. Spotify has a $4 billion valuation and Pandora a $5 billion valuation.

Songza, however, differentiates itself from the competition through a new system called music curation. The company does not just offer its users playlists based on their music preferences. It creates a music selection for them that takes into account what they are doing while listening to music. Its website has suggestions for playlists, like “working in an office, ” or “boosting your energy.” It even offers users music to listen to while they are in the bathroom.

The company predicts what you’re doing or feeling and then serves an expertly-curated playlist designed to make it better.

The music streaming company previously won a $4.7 million investment round from Amazon and Justin Bieber’s manager, Scooter Braun.

Google’s move may have been motivated, in part, by rival Apple’s $3 billion acquisition of Beats Electronics, an audio headset company with a budding streaming music service called Beats Music.

Songza CEO Elias Roman said he was not able to comment on the Google offer.

Songza was created by Aza Raskin and Scott Robbin, in October 2008. The New York City-based startup has raised a total of $6.7 million in funding from Amazon, Metamorphic Ventures, Lerer Ventures, and others as well as a slew of notable individuals such as Gary Vaynerchuk, Lady Gaga’s manager and frequent music startup investor Troy Carter. In March 2012, Songza released its Music Concierge feature for on iPhone and on line. The concierge gives users up to 6 situations based on time of day, with filters for whatever mood they might be in.

While its service is free, Songza inserts pop-up audio/video ads when initiating a playlist.

Songza was named one of the App Store Best of 2012 by Apple and one of Time’s Best Android Apps of 2013.



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