MySpace, the former king of the social networks, has made headlines today as it may be buying the social music suggestion service, iLike.

Since losing its crown to social networking darling Facebook, you just don’t hear a whole lot about MySpace any more except in the context of being the former top dog in the social media space.  Today all of that changed as TechCrunch is reporting that MySpace is close to acquiring the iLike music service for approximately $20 million.

ILike launched in 2002, but it was its ties to the early days of the Facebook app platform that rocketed it to popularity.  It now boasts over 50 million users, and has received $16.5 million in funding.

There is a very definite distinction being made in this deal that it is MySpace purchasing the service, and not MySpace Music which is a separate entity with funding from the major record companies.  While not confirmed, this is probably being done so that the recording companies will have no stake in the new venture.

Both MySpace and iLike are not commenting on the veracity of the report at this time, but there is some oddness to the details that make you ponder just how accurate the details are.

• With funding of $16.5 million, why would the investors be willing to accept a mere $20 million?  They will essentially only be getting their money back with little to no profit.
• $20 million for 50 million registered users seems so low as to almost be insane.  Facebook purchased FriendFeed last week for $53 million, and it is a much younger company with far less users.
• Just last week it was announced that iLike was launching a music download service.  With such a recent development in the company portfolio, wouldn’t you want to wait a while to see how it performs to agreeing to a sale price?

As neither company is commenting on the story thus far, details may emerge later that clarify what exactly is going on, but the biggest change to come with the official announcement (if the story even proves to be true) is that the price is incorrect.

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Entry was posted on Monday, August 17th, 2009 at 4:04 pm under Music, Social Media.

Read more entries by Sean P. Aune.
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