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Google Buys Beats Music Rival Songza

Google is adding Songza to its Play Music portfolio.

The company announced Tuesday that it is purchasing the streaming service that curates music playlists based on a user’s taste, themes or mood. Financial terms of the deal were not disclosed.

Google said it plans to use Songza to make its Play Music service more attractive.

Deal comes just after Apple bought the Beats Music service, which also emphasizes the kinds of music its subscribers prefer to hear, as are services like Spotify-owned Tunigo.

The Songza purchase also comes as marketers are spending more on online and mobile radio services in the U.S.

Ad sales generated $1.65 billion in the U.S. last year, a gain of 26.3%, according to digital research group eMarketer. That’s expected to increase another 23% to $2 billion this year.

At the same time, ad-supported mobile music revenue topped $1 billion in 2013 in the US, according to eMarketer, a figure that’s expected to grow to $1.64 billion in 2014.

Google is expected to generate nearly $20 billion in ad revenues this year, with 37% of that coming from mobile devices, eMarketer said.

“Google’s acquisition of Songza shows that digital music has plenty of monetization potential, despite the sluggishness of the download business and the relatively small size of the streaming economy,” said Paul Verna, senior analyst, eMarketer. “Clearly, tech firms such as Google, Apple and Amazon are placing big bets that music will eventually pay dividends as part of a broader digital content strategy.”

Songza’s features could also eventually be integrated into YouTube for video. Google said it has no plans to shutter the Songza service, as part of the acquisition.

Songza is available online for free, without the interruption of audio advertisements, and has versions for Apple and Android-powered mobile devices, as well as Google’s Chromecast.

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