MOUNTAIN VIEW, Calif. (

TheStreet

) --

Google

(GOOG) - Get Report

and

Apple

(AAPL) - Get Report

, which so far haven't stepped into one another's turf, are now competing to acquire some of the same Silicon Valley start-ups and are also starting to develop competing products, a report says.

Google was in serious discussions to acquire online-music company

Lala

before Apple clinched the deal for $85 million, the

Wall Street Journal

reports, citing people familiar with the matter.

Apple also reportedly pursued a deal for mobile-advertising company

AdMob

, before Google agreed to buy the start-up in November for $750 million.

Both Google and Apple declined to comment for the

Journal

.

The two tech firms also are moving deeper into each other's business, the newspaper notes.

Google is developing an operating system that would run on computers that compete with Apple's Macintosh machines. It also released a Web browser that competes with Apple's Safari. In the mobile arena, phones using Google's Android software, like the Motorola Droid, challenge Apple's popular iPhone.

Separately, sales of Apple's s iPhones in China have picked up after a sluggish start, with Chinese partner

China Unicom

(CHU) - Get Report

saying it has sold more than 100,000 smartphones since the official launch Oct. 30, the

Journal

reports.