Apple confirmed Shazam acquistion on Monday. Image Source: Peter Kotoff/Shutterstock
Apple on Monday confirmed its acquisition of music recognition app Shazam, saying it’s “thrilled” to be gaining one of the consistently most popular apps in its App Store.
This news had previously been reported by TechCrunch, which had one source claiming the sale price was around $400 million—far less than Shazam’s $1 billion valuation at its last round of funding.
“Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users,” the company said in a statement. “We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement
Shazam is arguably best known for its music recognition technology; tap the “Shazam” button in the app for smartphones and it will usually identify whatever song it hears after just a few seconds. Shazam has become so popular that there’s even a network TV game show called Beat Shazam hosted by Oscar-winner Jamie Foxx. In it, contestants must guess songs faster than Shazam can.
Shazam has also invested in second-screen TV viewing features, image recognition, and augmented reality services and products. Shazam’s talent and technology could be used in several of Apple’s products and initiatives, including Apple Music, Siri, and augmented reality.
Shazam already integrates with Siri. You can ask Siri “what song is this” while a song is playing externally, and, after a long pause, it will provide you with the name and artist, along with a “buy” button for Apple Music/iTunes gussied up with Shazam logo. Currently, the Shazam app allows you to add a song to your Spotify playlist after identifying it, regardless of whether you’re using an Apple or Android phone. We don’t know yet what, if anything, will happen to that feature because of the Apple purchase.
The acquisition is probably about much more than the widely known music recognition feature. Shazam has been developing augmented reality features that allow brands to serve up customized ads and transaction opportunities to users who use the app on visual or aural cues around them. Apple’s Tim Cook has made it abundantly clear that he expects augmented reality to be one of Apple’s biggest areas of growth and investment. Much of the iPhone 8 and iPhone X’s hardware and software is built with AR specifically in mind, and Apple is even rumored to be working on a pair of AR goggles, though it will likely be a while before we see those in the market, if we do at all.
Apple generally does not spell out the details of how it plans to use acquisitions, but there are a number of areas where Shazam’s current business overlaps with that of Apple’s, making for an interesting range of possibilities for where and how the two will work together.
Shazam’s core business is in music recognition: people use its app to capture a clip of music that is playing, and then it matches that against its large database to tell you what you are listening to, a business that has brought the company over 1 billion downloads of its app to date.
Over the years Shazam has augmented this with a number of other services: it sends users through to other sites to download and listen to the music at their leisure; it provides more information to users about the music and the artists behind it; it keeps charts of popular music based on the clips that it hears and that people want to identify. It’s also branched out into more marketing services based on visual recognition — essentially augmented reality plays where users can capture snaps of images that lead them to more content from a brand or another organization.
Through all of this, Shazam has developed some interesting partnerships, specifically with Apple and Spotify (who together get around 1 million referrals each month via Shazam), and Snapchat, which currently has an integration with Shazam where Snapchat users can “recognize music, engage with Shazam content, and send their music and artist discoveries as Snaps to their friends.” It is no surprise that these are also the three names that we heard were all approached and discussed an acquisition of the startup.
Shazam provided the following statement to TechCrunch on the acquisition.
“We are excited to announce that Shazam has entered into an agreement to become part of Apple. Shazam is one of the highest rated apps in the world and loved by hundreds of millions of users and we can’t imagine a better home for Shazam to enable us to continue innovating and delivering magic for our users.”
Notably, Shazam had a post-money valuation in its last round of over $1 billion — a far cry from the roughly $400 million that is being paid by Apple. The reason for this, one source says, is that for all of Shazam’s popularity and move into revenue-generating areas like marketing, the company never really found a solid business model for the long-term future.
“Shazam should have moved into streaming music years ago,” the source said, “which is one reason why the Apple deal makes so much sense.” Spotify, as a point of comparison, has healthy recurring revenues from subscriptions and Apple Music has both subscriptions and downloads — not to mention the wider use of Apple Music and the ecosystem pull it gives Apple for its wider hardware business. That hints at some interesting integrations coming up.
A Backstory on the Acquisition:
Apple and Shazam have had a friendly relationship for years, but the catalyst was that pending bid from Snap. As Recode first reported, the Snapchat parent had entertained buying the company.
It turns out that the conversations with Snap began about six months ago, after advisor Goldman Sachs drummed up interest. Snap was open to acquisition talks because its integration with Shazam’s music recognition technology had been going well.
Snap has had a volatile time on the stock market since it went public in March, and so Shazam was getting mixed messages about how much the social media platform would be willing to pay.
Shazam’s conversations with Apple began the following month, and they became exclusive about two months ago. From what we understand, the Spotify talks were earlier and couldn’t progress because of the price, and likely also the fact that Spotify, which is gearing up for a public listing, has a lot on its plate right now.
Eddy Cue, Apple’s senior vice president of Internet Software and Services, saw an opportunity for Shazam to help build out its music business. Since the days of the iPod, music has long been a priority for the company. Lately, it’s been focused on enhancing its Spotify competitor, Apple Music.
Cue believes that Shazam could help improve its offering and liked that the app had moved beyond music discovery, building out artist pages and other music-related content.
Shazam already integrates with Apple Music, referring many of its 100 million users to play songs on its platform. It also lets users buy the music directly via iTunes.
Techcrunch and Apple Music contributed to this report.
LeNora Millen 12-11-17
Apple Pledges $350 billion Investment in US economy Over Next Five Years
Apple is about to give the U.S. economy a huge boost in the form of a $350 billion five-year investment. As part of that, it will commit $55 billion this year alone and plans on adding 20,000 new jobs over that time frame. Following in the footsteps of Amazon, it also plans to add a new campus somewhere in the U.S. this year.
There is a lot of news here. Let’s start with the big-picture investment of $350 billion, which Apple says does not include ongoing tax payments, the tax revenues generated from employees’ wages or the sale of Apple products.
It will, however, involve taxes on repatriation of some of Apple’s cash reserves, which are currently in the $256 billion range. It anticipates $38 billion coming from repatriation taxes, but much of it will be capital expenditures on the part of the company.
For starters, there will be $30 billion, which will help fund a number of projects, including building the aforementioned new campus. The plan is for this to initially house technical support for customers. Apple says it will announce the location of this new facility later this year, with a plan to make the building run on 100 percent renewable energy sources.
But wait, it’s not done yet. It will also invest $10 billion of that money in new data centers in the U.S., adding to the seven already in operation or planned. There is a new one coming in Iowa and they broke ground on one in Reno just today, in addition to data centers already in operation in North Carolina, Oregon, Nevada and Arizona. (This number includes co-location facilities not owned and operated by Apple.)
Apple announced that it planned several investments that will contribute more than $350 billion to the United States economy over the next five years. (Photo/NationalTurk).
The company also plans to expand the advanced manufacturing fund it started last spring, from $1 billion to $5 billion. The idea is to bring advanced manufacturing jobs to the heartland and it is already funding projects in Kentucky and rural Texas.
Finally, Apple plans to expand its coding initiatives, helping students and teachers from K-12 and at community colleges across the country learn valuable coding skills.
While there is clearly a large public relations element to this announcement, the amount of money and investment involved from a private company here is just staggering and should help create new jobs, stimulate local economies and help educate students for the next generation of jobs. Hard not to like that.
Amazon Reveals ‘20 Cities’ That Could Be The Home Of Its Next Headquarters
Amazon has revealed 20 cities that could be the next home of its second North American headquarters, dubbed HQ2.
The candidates, selected out of 238 applicants, will move to the next round of Amazon’s selection process, the company said Thursday. Amazon will make a final decision on the site of its next headquarters this year.
The list of candidates includes Atlanta, Austin, Boston, Chicago, Dallas, Denver, Washington, DC, and Columbus, Ohio.
Amazon said it will work with each city to “dive deeper into their proposals, request additional information, and evaluate the feasibility of a future partnership that can accommodate the company’s hiring plans as well as benefit its employees and the local community.”
Amazon has promised a $5 billion investment and up to 50,000 high-paying jobs to the city that wins its selection process.
“Getting from 238 to 20 was very tough – all the proposals showed tremendous enthusiasm and creativity,” said Holly Sullivan, head of public policy for Amazon. “Through this process, we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”
Here are all the potential candidates:
- Atlanta, GA
- Austin, TX
- Boston, MA
- Chicago, IL
- Columbus, OH
- Dallas, TX
- Denver, CO
- Indianapolis, IN
- Los Angeles, CA
- Miami, FL
- Montgomery County, MD
- Nashville, TN
- Newark, NJ
- New York City, NY
- Northern Virginia, VA
- Philadelphia, PA
- Pittsburgh, PA
- Raleigh, NC
- Toronto, ON
- Washington DC
Source: Business Insider
Former Heavyweight Champion: Mike Tyson’s 40-arce Marijuana Ranch
Former Heavyweight Champion: Mike Tyson’s 40-arce Marijuana Ranch
Former undisputed heavyweight champion of the world, Mike Tyson, and his two business partners plan to open a 40-acre marijuana ranch 60 miles southwest of Death Valley National Park. According to mirror.com Tyson Ranch will allow growers to cultivate their crop and there will also be a cultivation school to help growers get the most out of their strains.
The operating company, Tyson Holistic, will employ mainly veterans and bring much needed jobs to the city it’s in.
#MustWeed Mike Tyson Preparing to Revolutionize Marijuana Industry, Breaks G… http://Fortune420.com/News #Cannabis #Stocks & #Crypto
Tyson is a long time believer in the medicinal benefits of marijuana use and with California legalizing recreational use of the plant, his plans to open the ranch are free to move full steam ahead.v
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