Now that Apple has Beats Music, Google wants to purchase a music streaming service of its own.
A report by the New York Post cites sources close to the matter that Google has reportedly proposed to acquire Long Island City-based music streaming and curation service Songza, which currently has 5.5 million active users six years after it was established in 2007.
"Google is offering them around $15 million -- the question is, does Songza take it?" claims the source.
The $15 million offer, however, is too small, according to a second source, who said that Google has laid down a higher offer to fend off other Songza suitors. It makes sense, considering the biggest names in the music streaming business are valued in the lower billions. Spotify, which currently has 40 million active users, 10 million of whom are paying customers, is valued at $4 billion, while Pandora with its 77 million users has a market cap of $5 billion.
Songza cannot boast of as huge a customer base as Spotify, but it holds an advantage with its ability to provide listeners with contextual playlists, an option which has gained generally positive reviews from Songza users. Unlike most on-demand streaming services, which use algorithms to create playlists, Songza injects a human element into the creation of its playlists.
"Songza is a free streaming music service that has expert-made playlists for every occasion and makes it outrageously easy to find the right one, at the right time," says Songza on its website.
Playlists are organized according user's moods and activities, such as playlists to "spice up your cookout" and for "healing your broken heart." Songza even has a playlist for when in the bathroom. For the curious, it includes Johnny Cash's "Ring of Fire" and Salt n' Pepa's "Push It."
Google has no shortage of streaming services on its own. It owns, after all, YouTube, which is technically the world's biggest streaming service with its 1 billion monthly users, although its focus is on video rather than audio. Google also has its own massive music library service which goes by the mouthful of Google Play Music All Access, which isn't exactly as easy to brand as, say, the Dr. Dre-fronted Beats Music.
Purchasing Songza would give Google the ability to provide smarter music playlists and a short, sweet brandable name. Apple chief executive Tim Cook himself said its $3 billion acquisition of Beats Electronics was partly fueled by the strong curation services offered by Beats Music.
Songza has raised a total of $6.7 million in investments from Amazon, Metamorphic Ventures and Lerer Ventures, and from individuals such as Lady Gaga's manager Gary Vaynerchuk, Justin Bieber's manager Scooter Braun and music startup investor Troy Carter.
