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Apple confirms acquisition of music site Lala

Apple acknowledges that it has purchased the struggling streaming service but declined to comment on reports that Lala was bought for very little money.

Apple has acquired struggling streaming music service Lala, an Apple spokesman told CNET News on Sunday.

Apple spokesman Steve Dowling confirmed the acquisition but did not disclose the terms of the deal or what the company intends to do with the 4-year-old Lala. The company scans users' hard drives and creates a duplicate music library that owners can access from Web-enabled devices. The company also sells songs for a dime each.

CNET News reported Friday that Apple was close to finalizing the sale and that one of the reasons Apple was interested in acquiring Lala is to obtain some of the company's payment and fulfillment systems, which a source with knowledge of the talks said could save Apple money.

However, it's unclear whether Apple may also be planning to launch some kind of streaming-music or so-called cloud storage feature.

The New York Times reported that Apple was approached by Lala after the company concluded that reaching profitability was unlikely. All Things Digital reported that Lala was acquired for a sum that meant a loss for its investors.

If things keep going this way, pretty soon there won't be any digital music space to cover. Many of the players around a year ago are gone: Ruckus and SpiralFrog closed. MySpace is gobbling up iLike and soon Imeem. Apple got Lala.

The frontrunners now appear to be Pandora, Amazon, Spotify, MySpace Music, (owned by CBS, parent company of CNET) and Zune's Marketplace.

To this point, not one of them has generated the kind of market share to challenge iTunes.