Last.FM: Mashing to the Music

The hub of Europe's music community may be the London streaming site, thanks to its mashups with MySpace, YouTube, and others

by Dan Carlin

Four years ago, when four German and Austrian friends founded London-based Last.FM, Web sites blending online music with community and social networking barely existed. Their idea was a precursor: a streaming-audio service that tracked user tastes and suggested new music. But then along came mashups, willy-nilly mergers of disparate Internet programs, and Last.FM zoomed off into a new world.

The entrepreneurs hardly could have imagined the opportunities mashups would unleash. Today, Last.FM is one of the richest stews of music and music-related community and content anywhere in the world. It offers not only downloadable MP3s and streaming music but also user pages, social networking, Wikipedia-style band biographies, personalized local concert listings, and a third-party e-commerce area for purchasing tickets and CDs.

Most of the features were added thanks to mashups with other sites or software—making Last.FM a kind of stitched-together online music hub. But mashups also have delivered much more than just technology, helping Last.FM build customer loyalty and extend its brand. "Last.FM is one of the most exciting startups in Europe" says James Governor, an analyst with market researcher Redmonk in London.

The Midas Touch

With 15 million unique users a month, 150,000 band biographies, and an amazing 65 million songs listed in its database, Last.FM has attracted the attention of big money. Last spring, Geneva-based Index Ventures made an investment in the company that it will describe only as "less than $5 million."

In European circles, involvement by Index is particularly sweet: It's the same firm that helped launch Skype (EBAY) and also invested in Betfair, Ofoto (EK), MySQL, and Vignette (VIGN).

Last.FM's managers have harnessed the mashup mentality almost from its beginning. Only a year after starting the company, they joined forces with another entrepreneur who was working on a related startup and merged the sites.

Since then they have opened up interfaces to Last.FM that allow it to connect with sites such as MySpace (NWS) and Flickr (YHOO). Interconnections like these are vital to building an extended community of users in the Web 2.0 world.

Love It or Leave It

All of this was unimaginable when the entrepreneurs started Last.FM, whose name tauntingly suggests the death of broadcast radio. The site was designed to pool the collective, often obscure, knowledge of music buffs by using a preference-tracking process called collaborative filtering.

Users could hit either "Love" or "Ban" in response to songs they heard through their streaming audio players. The feedback created a huge database of likes and dislikes. By comparing data among users with similar tastes, the site could then suggest new music to users that they might not know. That let music aficionados broaden their appetites thanks to the shared knowledge of peers.

The only problem was that Last.FM's software only tracked music that users heard online, not the songs they listened to on their computers via iTunes, Windows Media Player, and other programs. It was a sizable gap in Last.FM's data pool. But in 2003 the founders heard about a site called Audioscrobbler, started by 20-year-old University of Southampton student Richard Jones.

Audioscrobbler did exactly what Last.FM did not, tracking a user's listening patterns through a plug-in that worked with virtually any audio player. Felix Miller, one of Last.FM's co-founders, read about Audioscrobbler and had what he calls a "Eureka" moment.

Networking Networks

"We couldn't believe our luck that someone had built it already and was looking for a job," Miller recalls.