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8/19/2009
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MySpace Acquires iLike

In buying the popular social music service, MySpace will gain a connection to users of rival social networks Facebook, Bebo, and Hi5.

MySpace has agreed to acquire iLike and said it would broaden the music-focused social network into other areas of entertainment.

MySpace chief executive Owen Van Natta, who announced the acquisition Wednesday during a teleconference with reporters, said iLike would bring to MySpace needed technology and a strong executive team led by founders Ali and Hadi Partovi. Other stars in the organization include chief technology officer Nat Brown. Financial terms were not disclosed.

But iLike brings to MySpace much more than talent and technology. The company distributes the most popular music application on Facebook, Bebo, Hi5, and other social networks. iLike tracks the musical tastes of its 55 million registered users and recommends songs and artists. The iLike Web site also hosts band pages.

Also interesting about the deal is the connection it would give MySpace to nearly 10 million Facebook users who also use iLike. Natta was vague on the implication of having access to members of its fiercest rival, saying that plans to expand iLike's reach into entertainment beyond music, such as movies, would benefit all sites offering the company's application.

"I would think that other social networks would be thrilled," he said.

Natta declined to discuss product plans for iLike, but said the service would be integrated with the MySpace Music service, which enables musicians to set up profiles and upload music to offer to MySpace members.

For example, iLike offers more in the way of concert ticket sales, which would be used to boost sales on MySpace Music. "You can certainly expect to see advancements in that area," Natta said.

The acquisition is Natta's first major deal since taking over as CEO in April. Once the Web's largest social network, MySpace is now second to Facebook in number of visitors. MySpace grew in popularity, in part, through a focus on music, providing an effective environment for artists to communicate with fans.

In June, MySpace announced it would lay off about 30% of its workforce under a restructuring plan that would leave the site with 1,000 U.S. employees. MySpace, which is owned by News Corp., says it plans to run iLike separately and the company's headquarters would remain in Seattle.

Before starting iLike, Ali Partovi founded and sold LinkExchange to Microsoft, and his brother independently co-founded and sold TellMe Networks, also to Microsoft. Brown was an early architect at Microsoft and was involved in the creation of the highly successful Xbox video-game console.

Media reports of the pending acquisition first appeared on the Web Monday, starting with the blog TechCrunch.


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