Google Acquires Songza

Google has reached a deal to acquire Songza, the playlist site it had been rumored to be scouting for several weeks. Financial terms weren’t revealed, but a source with knowledge of the situation said the price was substantially higher than the $15 million figure reported by the New York Post in early June.

Songza employs about 50 music curators, who program playlists designed for moods, activities, times of day, or even weather in the listener’s area -- say, “Southern Soul Barbecue” or “Black Tie Bump ‘N Grind.” Google plans to hire all of Songza’s staff, and leave the Songza.com web site intact for now.

Google plans to incorporate Songza’s playlists into its Google Play Music All Access subscription service, enhancing its radio function. Google Play already has some human-curated playlists, but largely relies on algorithms for much of its radio-style programming. Songza may also be integrated into a paid YouTube service, which Google acknowledged it is readying.

“Over the coming months, we’ll explore ways to bring what you love about Songza to Google Play Music,” Google said in a statement announcing the deal. “We'll also look for opportunities to bring their great work to the music experience on YouTube and other Google products.”

“No immediate changes to Songza are planned, other than making it faster, smarter, and even more fun to use,” Songza said in a separate statement.

Expert-curated playlists were a differentiating factor for Beats Music, the service Apple acquired along with the Beats Electronics headphone business in a $3 billion deal announced in May. Beats allows users to fill in the blanks of a sentence describing a type of music they’d like to hear in their present circumstances -- “I’m on a boat and feel like celebrating with my family to R&B” -- and generates an appropriate playlist.

Songza began in 2010 as Songza Sets, a discovery-oriented product within MP3 store Amie Street. Its founding team sold Amie Street to Amazon the same year, and focused on Songza instead. Amazon invested in both Songza and Amie Street.

The deal gives a payday to company management and investors, including two prominent music-business figures: Scooter Braun and Troy Carter, the managers of Justin Bieber and Lady Gaga, respectively. Songza raised about $6.7 million during its lifespan.

A Google executive, VP of retail sales John McAteer, invested in the company as part of a 2012 convertible note worth $1.5 million. Songza most recently closed a $4.7 million round in September 2013, with investors including Metamorphic Ventures, Deep Fork Capital, Lerer Ventures, William Morris Endeavor, and author Gary Vaynerchuk, as well as Braun and Carter. Other prior investors include former NBA star Baron Davis, artist manager Julius Erving Jr., 24/7 Real Media co-founder Geoff Judge, and 1-800 Flowers.

Although Amazon added music to its Prime service last month, including a number of playlists, none of them came from Songza, according to CEO Elias Roman. The executive did not reply to requests for comment about today’s deal.

Amie Street acquired the original Songza, a search engine that located and streamed music files found on the web, in 2008. Designed by user interface expert, Mozilla designer and serial entrepreneur Aza Raskin, Songza derived its moniker from its creator’s name.

Although the windily named Google Play Music All Access was described in a March report from IFPI as “the fastest-growing [music] subscription service in 2013,” its market share remains very small compared with Spotify’s 10 million paying users worldwide. Google Play Music All Access has a library of 25 million songs, is available in 28 countries, and gives users a locker to store up to 20,000 of their own songs that can be played from various devices.

Google also made a bid for 8tracks, a site that hosts user-generated playlists, last fall. A source closer to that company told Billboard last month that a proposed deal was an “acquire-hire” arrangement, in which 8tracks’ staff would be at least as important to the buyer as its playlists and technology. But the profitable 8tracks chose to remain independent, the source said, due to factors beyond the deal’s proposed price.

Source: Billboard