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I'll be out $5 (and I was expecting to spend more this weekend) if they cease the streaming service. Just today, Etherpad abandoned their product. If Lala follows suit, I'll probably never pay money or commit seriously to a small startup's "cloud service".
Double that. Etherpad and Lala are two of my favorite apps. It'd be really tragic if both died today.
I don't think they're the norm. Several startups are in it for the long haul rather than selling out+shutting down.
But how can you tell one from the other? I'm sure many an entrepreneur has sworn up and down that they are in this for long haul and will never sell out, right up until the point where someone shows up with a large bag of cash.

Giving money to a small startup is always a gamble, and if all you've bought is access to a web app then you have to take into consideration that they can take that away from you at any time.

I'd say you can tell if the startup has been around for a year or 2. If so, they're probably going to stay around for a while.
lala's been around for a long time. (About a year (?) in the current incarnation, much longer in a CD-swapping incarnation. I used both)
There has been speculation that Lala was losing money and needed an out. So the service might have been close to its end anyhow.

But I do agree that I dislike the attitude of build to flip. I think most of the startups from the pre-recession era that worked with this "go big & flip" ideal are now showing their cards though. When the business model is to keep raising money until you sell, after the VC runs out they head for the hills...

That's the problem with web apps; you're at the mercy of someone else's business model.
I really hope that Apple realizes how good Lala is and doesn't shut it down. I'm listening to it right now, in fact, and it is incredibly nice to stream music from the cloud to my netbook. This might even be a good thing, perhaps now their iPhone app will be accepted more quickly and they'll have the funds to further invest in a desktop client like Spotify's.
I think the main challenge will be getting the labels to agree to lala-esque music deals with Apple. Most reports so far say that lala's licensing deals are not transferrable.

That said, Apple really has to do something in this space. I can't imagine that in 3 years Apple's music strategy will be exclusively about buying MP3s via iTunes, and not have any online component at all.

I too was listening to Lala when I heard about this, and I was instantly concerned. The current model that they have going is really good imo, and I feel like it's inevitable that Apple will cannibalize it and merge the functionality into iTunes, so as to exclude its use by non-iTunes users. I'd love for it to remain in a semi-independent kind of position, kind of like where Hulu is (was?). Not to be a hater (I actually like Apple products, even though I don't use them), but has Apple acquired any technology recently that they haven't locked down into their little ecosystem?
To be fair Apple doesn't normally acquire products they usually build their own. The only other two acquisitions in recent memory were PA-semi and that maps company neither of which had a directly consumer facing product that I can recall.
and also, somewhat ironically in this case, iTunes
Do you really think Apple will continue to develop TWO desktop music apps simultaneously (or for that matter iPhone apps)? Best case scenario for a Lala desktop client now is for it to be rolled into iTunes.
Is everything that doesn't run on the local machine called a "cloud" application these days? The use of the word seems to have gotten out of hand to the point where saying something runs "in the cloud" is just synonymous with the term remote sever.
Being nitpicky for a second:

There is a different between something being "in the cloud" and "on a server", the difference being that if your stuff is just on a remote server, you could go to wherever it is, point to it, and say "that's where my stuff is". With cloud apps, your data / service is always available by the same means, but its physical location / method of distribution may have changed an indefinite number of times without you ever noticing. It's just like shared hosting, where your server state is continuously preserved, even though you're not actually hitting the same box.

That, said the term "cloud" is beaten to death, not because it's inaccurate, but because grid / distributed computing is now the norm rather than the exception when dealing with web apps.

Exactly which is why I find it dubious that the term is used so readily when in most cases we have no knowledge of a services underlying implementation. It's like the F-word of computing over used and generally unnecessary.
It doesn't make sense for Apple to buy Lala just to offer their own streaming service via iTunes. Apple could have done that in house. I think they wanted the social networking pieces. Not only for discovery of new music but as a legitimate social networking site for like minded individuals. A Twitter for music sharing, discussion, official band pages, tour information, merchandise advertising, etc. The difference is Apple has a business model. Free streaming via the web, paid subscription service to sync the music offline to your iPod/iPhone, and classic iTunes purchasing for music & video. Might as well expand it to the iTunes App Store too. Peer recommendation of apps, more options for promoting your apps via social networking, maybe one-click purchases/installs via the web. Multi-player iPhone gaming with your iTunes Friend List (ala Xbox Live) Tons of possibilities for Apple. All this fits nicely into iTunes LP, Genius, maybe even MobileMe.
This is probably pie in the sky thinking, but I hope this prompts Apple to launch a browser based version of iTunes, using the technology/expertise acquired from Lala.
I don't know if its pie-in-the-sky as much as its an inevitable reality? Everything is moving to the web. And they are building a big server farm.

Now that things have shaken down a bit following the mp3.com legal debacle, it seems clear that Apple can let people access their own iTunes library via a browser without upsetting too many people.

Yes. I didn't want to jump the gun, but this is certainly the ways things are going.

I really hope you are right! :P

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