Why Apple Is Buying Shazam For $400 Million

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Apple is set to acquire UK-based music identification startup Shazam next week for a sale price of up to $400m. Later that year, it arrived on Android, and it has continued to maintain a strong userbase.

Apple is known for buying up other companies, though Shazam is certainly no small startup. The 18-year-old company, which has required twice the average time to deliver an exit for backers, was valued at about $1 billion when it closed its last funding round in 2015.

Buying out Shazam would also rid Apple of having to pay Shazam for click-throughs to iTunes purchases like it does now.

The most obvious is bringing Shazam's music recognition capabilities to Apple Music, perhaps helping users more easily find music.

The deal could allow Apple to integrate a popular consumer feature directly into its iPhones at a time when Apple's innovation crown is under threat from Google and Samsung.

Shazam's technology was introduced in 2002 as a dial-up service that would listen to a song for 30 seconds and send its user a text message identifying it.

TechCrunch first reported on the pending deal. Apple has been looking for ways to enhance its music offerings and compete with Spotify. The company also lost approximately $22 million the year before that.

Shazam needs no introduction, but it works by identifying short audio clips from songs, TV shows and more using machine learning techniques.

Shazam CEO Rich Riley previously told Business Insider that the company would make sense insider a larger company looking for a foothold in music or advertising.

If Apple is considering making its very own Google Lens, then this would be a good step towards achieving the goal.