It was 2009 – ages ago in Internet time – and there was this little company called Lala.com. This was an online streaming music service where you could preview songs, stream music from your collection, and buy CDs from the Lala store.
And according to ZDNet, Lala was a real thorn in Steve Jobs’ side because it competed with Apple’s iTunes.
Back then Lala had a deal in place with Google, so if you searched for a song on Google, Lala’s results would come up at the top of the list, no doubt taking away sales from Apple’s iTunes store.
Lala was owned by Bill Nguyen, who eventually decided to sell the company. According to ZDNet’s account, Bill first approached Google, where he already had a strategic partnership. But Google evidently made a “lowball” offer, possibly as a test to see if Bill might just be “desperate” to make a sale at a bargain basement price.
That didn’t work out so well because Nguyen next approached Apple for what turned out to be a very short conversation with Steve Jobs. According to The Verge, the meeting went something like this:
Steve led the conversation while eating a beet salad. “I’m going to give you a number, Bill, and if you like it, let’s do it and just be done with this whole thing. Okay?”
Bill agreed. Jobs passed a piece of paper to Nguyen and Bill nodded.
The deal was done.
In just a few short months, Apple shut Lala down. You see, Jobs didn’t buy the company for its technology or its people. He bought it to eliminate the competition and give iTunes a much better shot at improved search engine placement.
I like this story because it illustrates three key lessons:
- First, high search engine placement adds significant value to your company.
- Second, if you’re going to do a deal, speed of implementation is essential. I can imagine Google kicked themselves pretty hard for losing out on a chance to acquire Lala.com and take more share away from iTunes.
- Third, one of the best and fastest ways to grow your business may be to look at buying out your competition.
Not too long ago, I had a chance to talk with Steve Wozniak, who co-founded Apple with Steve Jobs. It was at one of my Mega Partnering events when “Woz” told me that when Apple was a young company, the co-founders made sure they got the right coaching to get their business off the ground.
I’ll bet the coaching Jobs received in the early days helped him learn how to structure deals strategically and act quickly on opportunities – just like he did when he acquired Lala.com.
By the way, if you’d like to learn some more lessons from how Steve Jobs ran his business, check out my video “iCEO: 25 Life and Business Lessons Learned from Steve Jobs.” There’s a lot of great information in that video.