Spotify’s High Price Prevented Google Inc From Buying It [Report]

Google Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) intended buying Spotify AB-a music streaming service towards the end of last year, but few issues stood as barriers, says a report from the Wall Street Journal citing  a person familiar with the matter. The two major reasons cited for the failure of talks are the high pricing and low enthusiasm of Google’s Chief Executive Larry Page for subscription entertainment services.

Spotify could have given Google an edge over Apple

The source, also, informed that a prior Google executive Susan Wojcicki was the one very much interested in buying Spotify. Wojcicki joined YouTube in February. Also, Google disclosed in a December letter to the Securities and Exchange Commission (SEC) that it had “pursued but discontinued a potential buyout of a foreign company, with a valuation estimated in the range of $4 billion to $5 billion.”

The iPod and iTunes, introduced by Apple Inc. (NASDAQ:AAPL) in 2001, has been a key pillar for the mobile ecosystem. Google has been struggling to match Apple and has made several attempts including launching a subscription music service of its own known as Google Play Music All Access and the acquisition of a music streaming service Songza Inc. YouTube based music subscription service will soon be launched by Google as per the reports, which it hopes to be competent with Spotify.

Google’s acquisition of Spotify if materialized would definitely have put the internet giant way ahead of Apple as far as competition in the realm of music is concerned. This is due to the fact that Spotify has over 10 million paid subscribers, compared to several hundred thousand subscribers for Beats Music.

Were there any talks?

The person who knows of the talks that took place between Google Inc. (NASDAQ:GGOGL) (NASDAQ:GOOG) and Spotify has informed that Spotify was valued at $4 billion that time. However, around $10 billion was being asked by it for sell-off.

Contrary to the report of the WSJ, a report from tech blog Re/code says that there have never been any talks between Google and Spotify regarding the acquisition.

“There has not been a single conversation about Google’s interest between the two,” said Re/code citing one source. “There was never a price, never a negotiation, never anything.”