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Dropbox acquires music streaming service Audiogalaxy

The service will be shut down in an apparent "acqui-hire," suggesting that the file-sharing specialist Dropbox may be getting ready to tune up a music streaming service.

Audiogalaxy Audiogalaxy

Dropbox has acquired streaming-music provider Audiogalaxy in a move that suggests the file-sharing service might be getting ready to launch a cloud music offering.

The Seattle-based startup announced the acquisition in a blog post on its Web site but did not reveal the financial details of the deal. As part of the acquisition, Audiogalaxy said it has ceased accepting new signups and playlists will only be available to users until the end of December:

Today, we are thrilled to announce our team is joining Dropbox! We are excited about the opportunity to join the amazing folks at Dropbox and bring great new experiences to 100M+ Dropbox users.

A file-swapping powerhouse in the heady peer-to-peer days, Audiogalaxy was hobbled by a 2002 legal settlement with the recording industry. After being labeled "one of the greatest defunct websites of all time," the brand languished for many years before quietly relaunching earlier this year as a Pandora-like cloud-based music streaming service.

The new service allowed users to access their music libraries from any Internet-connected device, as well as discover new music via "mixes," which used a proprietary algorithm to recommend music streams. Those streams, or playlists, could then be customized by adding artists.

The statement uses the word "transition" to describe the service's closure, suggesting that this acquisition might be more of an "acqui-hire." Indeed, Audiogalaxy CEO Michael Merhej told GigaOm this afternoon that "there are natural synergies in the talent our team possesses and Dropbox's mission."

Cloud-based music streaming has become a hot arena in recent years. Apple, Google, and Amazon have all launched music lockers, and Apple is rumored to be developing a music streaming service to take on the likes of Pandora and Spotify. Audiogalaxy's combination of experience in both storage and streaming could be a leg up for Dropbox.

CNET has contacted Dropbox for comment and will update this report when we learn more.