Breaking: MySpace Close To Acquiring iLike For $20 Million
Monday, August 17, 2009; 6:10 AM
MySpace is close to acquiring popular social music service iLike, we've confirmed with multiple sources. The deal, which should close this week, will be MySpace's first acquisition since new CEO Owen Van Natta took control of the company in April 2009. The price is "around $20 million."
iLike, which launched in late 2006, is a social music recommendation service that now has more than 50 million registered users. It tracks what you listen to and like and gives you recommendations on new music based on that data as well as what your friends are listening to. It is the top music application on Facebook, Bebo, Hi5 and just about every other social network other than MySpace, which has MySpace Music.
iLike also hosts band pages which are second in popularity only to MySpace Music. By acquiring iLike, MySpace solidifies their already leading position as the most popular online identity for bands. Last week iLike also launched their own music download store.
Details are still flying in, but at first blush the deal is particularly interesting for two reasons.
First, simply because iLike is so deeply integrated into the Facebook experience. Nearly 10 million Facebook users use the iLike application every month. And iLike has also been a key part of Facebook's ongoing struggles with what-to-do-about-music. MySpace is now going to own this.
Second, it's MySpace, not the MySpace Music joint venture with the music labels, that is acquiring iLike. We'll have more to say on this shortly. We're hearing that a key driver of the deal is the iLike team, particularly founders Ali Partovi, Hadi Partovi and Nat Brown, and the underlying technology.
Competitor Last.fm was acquired by CBS in 2007 for $280 million. June 2009 Comscore stats show Last.fm with 12.9 million monthly unique visitors. iLike had just 3 million monthly unique visitors, but that doesn't take into account the massive usage of the service on social networks.
The company has raised a total of $16.5 million from the founders, Scott Banister, Bob Pittman, Vinod Khosla and Ticketmaster to date. But their last round of funding was in 2006, where Ticketmaster put the bulk of the capital in via a third round of financing that valued the company at a whopping $53.2 million.
In Q4 2008 Ticketmaster wrote down a number of their venture investments, including a $5.8 million charge for iLike. Internally, they valued that $13.3 million investment at just $7.5 million. Last month we reported that iLike was considering a new round of financing that would cash TicketMaster out of the company.
Neither MySpace nor iLike would comment on this story.
Update: More thoughts on the deal here.