Dropbox buys Audiogalaxy: next up, a cloud music service?

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Dropbox has acquired Seattle-based music startup Audiogalaxy, according to a post on the Audiogalaxy blog. Details of the transaction haven’t been released, but it looks like an acqui-hire that could get the Dropbox team some serious media smarts. The folks behind Audiogalaxy built one of the pioneering file sharing applications, and made a sort of comeback with a mobile music service focusing on Pandora-like personal cloud streaming earlier this year.

The announcement blog post read, in part:

“Over the last few years we’ve built a wonderful music experience on the web and mobile devices, attracting loyal users from all over the world. We are excited about the opportunity to join the amazing folks at Dropbox and bring great new experiences to 100M+ Dropbox users.”

Audiogalaxy has already stopped accepting new sign-ups. Playlists built by its users will only be available until the end of the year, and the rest of the service will shut down some time in 2013.

Audiogalaxy was one of the pioneering music sharing services that combined a web-based UI with a P2P client. The service shut down in 2002 as the result of a music industry lawsuit. Audiogalaxy’s team went on to create Foldershare, a Dropbox-like file sharing service that was acquired by Microsoft in 2005.

The core Audiogalaxy team left Microsoft in 2008 to once again work on an Audiogalaxy music service, which briefly focused on the possibility of a licensed file sharing offering dubbed Choruss that never launched. They ended up refocusing on a personal music streaming service that would stream MP3s from a user’s hard drive to mobile devices.

How does that all fit in with Dropbox? Audiogalaxy CEO Michael Merhej was coy when I contacted him Wednesday afternoon, only stating that “there are natural synergies in the talent our team possesses and Dropbox’s mission.”

So here’s my take on it: Dropbox has seen companies like iTunes, Amazon and Google move into the cloud music space over the last few months, and it doesn’t want to be left out as consumers discover cloud services for media storage and consumption. Audiogalaxy’s team is especially valuable because it has more than a decade of experience with making sense of those media files, using all the metadata that come with them to provide very unique services – which is exactly what Dropbox may need to compete.

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