Is Google trying to buy Spotify? Here’s why a deal would be great for both companies.

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Interesting rumours are doing the rounds suggesting that Google might be attempting to acquire music streaming service Spotify. Such a deal could massively upset the music and tech industries.

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TechRadar reports that Google was on the cusp of making the deal, before deciding that the $4-5bn price was simply too high. To put that into some perspective, Instagram cost Facebook $1bn, and Google’s most recent acquisition, Nest (the smart thermostat company), was in the region of $3.2bn.

Since then, others have apparently denied that talks even took place.

Such a deal would perhaps make great sense for the two companies though: Whilst Spotify is currently out there on its own, albeit as the current major player in streaming, it has much less financial clout than the really big tech players. If Apple or Google separately were to get serious about offering competition, it could be very dangerous for them: See how another titan, Amazon, recently launched Amazon Music in the US and gave it away for free to all Prime customers.

For Google too, an acquisition would be a wise investment. Whilst Google already has its own music store and a number of music products, none of them quite have the same reach as Spotify, or indeed, Apple’s iTunes. If Google wanted to muscle in on music, buying Spotify would be a quick way to a massive market share – which would make Google one of the biggest names in music overnight.

And let’s not forget that Google is rumoured to be planning a controversial combo YouTube / music streaming service. It’s much easier when you don’t have to start from zero customers.

Whether the price is right is a question for the money people – but you can be sure that if Google is eyeing up Spotify, then its competitors will be too.

James O’Malley