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MySpace is in advanced talks to buy music service iLike for about $20 million, according to Techcrunch, which cites unidentified sources. We have confirmed the talks, and that the deal is separate from its MySpace music venture. Our source says the price is likely to be higher than $20 million, but still cheap compared to what it took its last round at (around $55 million) and its hopes last year when it was riding high on its Facebook app.
If it does go through, this would be MySpace CEO Owen Van Natta’s first major purchase since taking over in April and suggests his intention to continue building up the social net’s ties to record companies and concert promoters.
The tie-up also represents something of a challenge to Facebook, as iLike has earned much of attention its gotten as a Facebook app since launching about three years ago. iLike claims to have about 50 million registered users, and just a trickle of those users could help boost MySpace’s growth at time when Facebook has been considered likely to surge. For iLike, having MySpace behind it will help it better compete against more prominent online music discovery sites like CBS’ Last.fm and Pandora. The company has raised about $35 million from founders, Scott Banister, Bob Pittman, Vinod Khosla and Ticketmaster to date (this includes its spinoff from Garageband in 2006). Late last year there were reports that Ticketmaster was looking to exit the deal as it wrote down its $5.8 million investment in Q4 last year.
Rafat adds: This also puts into question the future of MySpace Music, which was set up a separate JV between MySpace and music labels. The launch, which was a pet project of Chris DeWolfe, hasn’t exactly taken off, and with the new management team in place, it is likely the days for the JV are numbered.