Apple shuts down Lala music service. Will Google serve iTunes?

Search for a popular song on Google, and the first result is often a playable link to the song on Lala, a service launched by entrepreneur Bill Nguyen in 2006 and sold to Apple in December of last year.

Nguyen’s original business plan was to broker CD trades among music fans. He switched to a music-industry-approved streaming service in 2007. Apple acquired Lala for a reasonable $80 million.

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Early Friday, Lala.com’ s home page announced that “The Lala service will be shut down on May 31st.” That raises two questions.

First, what is Apple planning for Lala? It seems pretty likely that Lala will be replaced by an iTunes-branded music service that operates in the cloud, rather than requiring listeners to download individual songs to their computers and phones.

Ethan Kaplan, senior vice president of emerging technology for Burbank, California-based record company Warner Elektra Atlantic, speculated this morning that Apple will announce such a service at the company’s June 7th Worldwide Developer Conference. Kaplan noted that Apple has built a new $1 billion data center in North Carolina. Is it for app downloads? No, Kaplan basically said, it’s for streaming music and video.

There’s a second question: What will Google do without Lala search results? The search supergiant could elevate the results from its other music partners, including Pandora and Rhapsody. But it would be lazy armchair punditry to presume that Google and Apple haven’t already put aside their competitive issues and cut a deal to replace Lala with iTunes links atop Google music searches.

Yahoo has claimed that nearly 6 percent of Yahoo search requests are music-related. It’s safe to presume Google’s precentage of music searches is likewise non-trivial. Add to the mix that Apple chief Steve Jobs has always an overt lover of pop music and its culture. And remember that Apple is already Google’s default provider through Lala.

To paraphrase Ethan Kaplan, if a Google/iTunes search deal isn’t the next step, it’ll be weird.

[Update: Media blogger Peter Kafka writes, “I’ve been on the phone all day with music industry sources. None of them know of any specific plans Apple has to replace Lala. So if you’re expecting to hear about an ‘iTunes.com’ offering in the near future, you’re likely to be disappointed.”]