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MySpace Buys Popular Facebook App iLike

Posted by: Douglas MacMillan on August 19, 2009

After rumors of an impending deal leaked two days earlier, MySpace officially announced its acquisition of music startup iLike on Wednesday. Though terms of the deal were not disclosed, AllThingsD reported that the unit of News Corp. paid $13.5 million in cash upfront, and promised an additional $6 million to retain founders Ali and Hadi Partovi and other iLike talent.

Years after its launch in 2002, iLike found its greatest success in becoming the de facto music player on the social networking pages of MySpace rival Facebook. Lacking its own music service, and acknowledging the popularity of iLike on its site, Facebook changed the name of the application in its menus to just “Music” in April. Of iLike’s 50 million registered users, 31 million installed the music player on their Facebook pages.

There are no plans to disrupt the use of iLike on Facebook or any other sites, MySpace CEO Owen van Natta said on a call with the media. On the contrary, he thinks the service could help MySpace extend its reach to more areas of the Web. “This marriage has to do with a distributed Web and how it is the Web can serve our users in a more distributed way,” said Owen van Natta, a former executive of Facebook hired by News Corp. in April.

Even if MySpace likes the idea of having instant real estate on Facebook, there's no guarantee the larger social network will reciprocate: Facebook could decide to pull the plug on the application, though it would face a barrage of criticism from its vocal users and would be hard-pressed to offer up an alternative with as much appeal.

Facebook spokeswoman Brandee Barker says that's unlikely to happen as long as the iLike application stays the same. "We expect that users will continue to discover and share music through the iLike application on Facebook," says Barker. "We look forward to working with the iLike team to make music a great social experience on Facebook and across the Web."

The reported price of the iLike acquisition is likely to sound some alarms in Silicon Valley. In 2006, a large investment round led by Ticketmaster valued the company at $53.2 million. It doesn't appear that the company lacked suitors, either: Amazon and Facebook also showed interest in buying iLike, according to TechCrunch.

The valuation "confirms two things," says David Pakman, partner of venture capital firm Venrock. "One, that music is not a great place to make money. And two, that value has to be created, not just consumer clicks." Despite the high number of folks adding iLike to their Facebook profiles, few were opening up their pocketbooks for concert tickets or buying into other ways the company collected fees.

Still, many tech entrepreneurs welcome any activity in the startup space, regardless of the price. "You’re seeing more interest in the streaming space and music space in general. That’s a dramatic turn from six months ago," says Jeff Yasuda, founder of the Twitter-like music service

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Reader Comments


August 19, 2009 11:22 PM

pretty interesting about ilike - i guess myspace iliked them :)


August 20, 2009 01:48 PM

Of course Facebook could just buy out and merge it into Facebook as a music interests section and effectively have an integration and movie/music site that is far superior to myspace. The musical profiling for example would massively enhance Facebooks social networking elements and make iLike which is rather inferior in design, seem much more childish (which is the core problem with myspace that it was always the teenager conpared to the "young adult" Facebook).


August 20, 2009 04:54 PM

get serious martin


August 20, 2009 06:53 PM

i agree with martin but think that imeem & facebook should strike a deal. my two most often visited sites merged to one would be amazing.. and i think that ticketmaster should also get involved that way i can plan concerts and let all my friends know i'm attending them without having to update my own status

Brian J Perkins

August 20, 2009 09:15 PM

Myspace focuses on music, they always have. They are the social networking site for the young band and the people that follow the music scene. Thus being their core audience, teenagers are the ones that often idolise popular musicians. Seems only right. Whilst Facebook is all about building connections between people and the interests that follow from that.


August 23, 2009 11:51 PM

juist looked facebook

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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