Kleiner Perkins to invest in iPhone app Shazam

Kleiner Perkins, known for backing Google and eBay in their start-up phases, is leading a funding round in Shazam that includes Acacia Venture Partners and DN Capital.

Shazam is a seven-year-old firm that sells and identifies songs and which passed 50 million users on Tuesday.

Kleiner Perkins partner Matt Murphy, who manages a fund that invests in iPhone application developers, told Reuters in an interview his firm saw Shazam as a springboard for advertising, music sales and other offerings, because it was one of the most popular of the Apple iPhone App Store's 85,000 offerings.

"It is one of a handful of companies in this new mobile space that has significant break-out traction," Murphy said.

Kleiner Perkins' investments coincide with mounting interest in mobile devices, as gadgets from the iPhone to Palm's Pre and Amazon's Kindle capture consumers' imaginations and dollars.

Shazam's program is available on Research in Motion Ltd Blackberries, Google Inc Android phones, Nokia Corp devices, and other smartphones.

iPhone users alone have downloaded 10 million free copies. Murphy said the iPhone Apps Store will soon offer a paid version -- similar to that offered for Blackberries -- for $4.99. That will allow users to identify or "tag" an unlimited number of songs a month, instead of just five.

Murphy said Shazam is the seventh company in which Kleiner Perkins has invested in as part of a year-old partnership with Apple to focus on developing wireless applications.

Under that partnership, the money comes from Kleiner and limited partner investors, while Apple provides help on technical and marketing issues.

Other companies in the mobile fund include a gaming company, a mobile social networking company, a home automation control company and a shopping company.

"Apple introduced us to Shazam," said Murphy.

Murphy won't say how much money Kleiner, Acacia and DN Capital, is putting into the company in this funding round.

Shazam -- named for a D.C. comic-book hero popular decades ago -- turned profitable from advertising, paid versions of its software and by selling songs and other band-related items.

Its users hold their mobile phone near the source of a song and a few seconds later they learn its name, the artists and the albums.

(Reporting by David Lawsky; Editing Bernard Orr)