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Summary:

Updated: Yesterday, one source familiar with the situation said it could take weeks to wind up a deal for MySpace to pick up Imeem; today, t…

imeem

Updated: Yesterday, one source familiar with the situation said it could take weeks to wind up a deal for MySpace to pick up Imeem; today, there’s a letter of agreement, as TechCrunch first reported and paidContent has confirmed. It calls for about $1 million in cash, although I’m told the total value of the deal is considerably higher is in the $7-9 million range plus a comparable earnout for employees who move to MySpace. The company recapitalized earlier this year on a valuation of $10 million.

Neither company is commenting on the record but someone wants it out in public now — possibly in the hopes that by publicizing it, a buyer willing to spend more will swoop in. On the Imeem side, even a deal worth $5 million or more isn’t much of a victory given the company has raised as much as $75 million, although it does seem some jobs are being saved. As we reported earlier, that includes engineers and sales — roughly half of Imeem’s 50-plus employees. It’s not clear yet if that will include CEO Dalton Caldwell, a cofounder, and COO Ali Aydar, a Napster vet who held the same job at Snocap when Imeem acquired it last year.

Morgenthaler Ventures holds the largest stake in the social music service. Warner Music Group (NYSE: WMG), which wrote off an earlier $16 million investment and $4 million in expected license fees, invested again this summer.

Side note: A number of people don’t seem to understand the difference between a lawsuit and a judgment. Indie label The Orchard Enterprises (NSDQ: ORCD) sued Imeem in U.S. District Court for the Southern District of New York on Oct. 21 for copyright infringement, claiming it bought the rights to certain songs in bankruptcy court and that Imeem didn’t have streaming rights. The Orchard wants $150,000 per infringement and a preliminary and permanent injunction barring Imeem from playing the songs. Imeem was served with the papers on Nov. 3; that notice is the latest thing that shows up in the docket report. No injunction. No ruling. It’s still a threat, as Om, who got it right, wrote Tuesday.

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  1. This is a big deal, I’m surprised by how little coverage it has received.

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