It's no secret that Spotify loses money quarter after quarter, and that those losses accelerate with each new ad-supported user. There have also been recent signs that the major labels, who as Spotify stockholders would gain millions after a purchase, are becoming almost as restless as musicians are over the size of their Spotify checks.
Now, there are signs that Google could come to the rescue by purchasing the world’s most popular music streamer, and that Spotify would welcome the move.
A few days ago Spotify announced that it had moved it's streaming back end Google with a tantalizing headline “Announcing Spotify Infrastructure’s Googley Future.”
“it’s rare that we get to talk about the exciting world of technical infrastructure – the real power behind the music – but today is special. Today we are announcing that we’re working with the Google Cloud Platform team to provide platform infrastructure for Spotify, everywhere…
What really tipped the scales towards Google for us...has been our experience with Google’s data platform and tools…Google has long been a thought-leader in this space...
We’re pretty excited about our Googley future and hope you’ll find it interesting too."
That led respected technology commentator and investor Om Malik to tweet, “First step towards acquisition by Google."
First step towards acquisition by Google. Also, how much do you want to bet that Google gave it for almost FREE. https://t.co/1U6vPKYkzy— Om Malik (@om) February 23, 2016
Chris Castle of the industry blog Music • Technology • Policy also believes that a Spotify sale to Google is in the works. Castle postulates that a soft IPO market limits the options for investors, who have pumped $1.56 billion into Spotify over 12 rounds, to exit before the cash runs out. Nervous Investors + Google Acquisition = Happy Investors.
Castle also points to the 2014 addition of former Google top exec Omid Kordestani to Spotify’s Board Of Directors as further proof. Kordestani continues to sit on the Spotify board.
What's Next ?
So there both technological and financial incentives for Spotify to sell to Google. And it’s hard to argue that the tech giant’s repeated forays into music have been disjointed and not particularly successful.
The next indications that a Spotify sale to Google is in the serious discussion stage will likely come via public encouragement from major label executives salivating over a possible multi-million payday. Stay tuned...