The popular song-recognition mobile app Shazam was acquired by California-based Apple for $400 million. While an announcement of the deal was made in December 2017, the acquisition was delayed by a European Union investigation into potential antitrust issues. However, the EU regulators approved the merger in early September. In one step following the acquisition, Apple has announced that it will be removing all advertising content from the app. The ad content will be removed on both the iOS version, for Apple’s mobile devices, and the Android version.
Around the world, people have downloaded Shazam more than 1 billion times. According to Apple’s announcement of the acquisition, people use the app over 20 million times each day. One of the earliest additions to Apple’s App Store, Shazam raised people’s awareness of the potentials of a mobile app. When people hear a song they want to recognize, they select the app, hold up the phone and allow it to hear a song playing; in response, the app would produce the artist and track information of the sample.
The app is a solid match for Apple’s interests; in addition to making mobile, portable and desktop devices, Apple is one of the largest vendors of musical downloads. Its iTunes app and store revolutionized the way that people buy and save music on a song-by-song basis. Integrating Shazam with iTunes can help to drive purchases as well as providing a beneficial service to users.
Many startups are developed with an eye toward a later merger or acquisition by a largerSilicon Valley firm. As in this case, even a promising deal can be delayed for some time by regulatory concerns and contractual issues. An attorney who has experience with these matters can be a valuable resource throughout the transaction.