Over the weekend it was reported that Apple has agreed to purchase Lala a start-up based in Palo Alto, California. Word of the acquisition came from inside the four year old start up late last week.

Lala is a lot like the iTunes store in the way users purchase music, but instead of the tracks being downloaded they are stored on the “cloud” and can be listened to by the purchaser with any Internet accessible device. Users of Lala also have the option of downloading tracks but the price is much higher between 69 and 79 cents compared to just 10 cents streamed from the web.

In a rare comment to The New York Times, Apple spokesman Steve Downling said that “[Apple] buys smaller technology companies all the time, and we generally do not comment on our purpose or plans.”

A person familiar with the deal did not disclose many details of the deal but did offer the opinion that Apple was most likely buying the company for its engineers and co-founder Bill Nguyen.

[Update] A Reuters source over the weekend disclosed that Apple is looking to add some kind of streaming model to the current iTunes store.

“Apple recognizes that the model is going to evolve into a streaming one and this could probably propel iTunes to the next level,”