Apple Confirms Purchase of Music-Recognition App Shazam

For nearly 10 years, Shazam has been something of a one-trick pony. Its app has a single purpose: identify a song that's playing and connect users to a service to download or stream it.

But behind the nifty song-detecting technology lies something that could explain why Apple is buying Shazam for a reported sum of $400 million -- its treasure trove of data.

The British company got its start in 2002 by offering a phone service that helped people identify music. Users dialed 2580, held their cellphones to a source of music, and Shazam responded with a text message containing the name of the artist and the title of the song.

In 2008, the company rolled this feature into an ad-supported app and launched it on the newly created Apple App Store. It started making money from music referrals too. It became and remains one of the most-downloaded apps.

Its longevity puts the company in a unique position, analysts say. Over the years, as technology has advanced, the software that runs Shazam is no longer considered cutting edge, and the tech itself is now easily replicable. But in an industry where apps commonly fizzle out after a few months, Shazam has amassed something valuable to the giants of Silicon Valley: a trove of user data built up over a decade.

"The only reason they've been successful is they've done it for years, and they've got a strong install base of customers," said Daniel Ives, head of technology research at GBH Insights. "For Apple, it's about buying that customer base and data."

Information such as what music customers search for, what they're buying, and their historic music preferences are "very valuable in terms of Apple's library of knowledge," Ives said.

Both Apple and Shazam confirmed the acquisition Monday.

"We can't imagine a better home for Shazam to enable us...

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