Page last updated at 20:41 GMT, Wednesday, 19 August 2009 21:41 UK

MySpace to acquire music service

By Maggie Shiels
Technology reporter, BBC News, Silicon Valley

Rupert Murdoch speaking about MySpace
MySpace is owned by Rupert Murdoch's News Corporation

MySpace will acquire the popular music discovery service iLike that allows users listen to and share music across social networks.

iLike reportedly turned down an offer from rival Facebook, where it is the top music application.

The company has 55 million registered users and has been prominent on most social networks apart from MySpace.

"The iLike acquisition advances our relentless pursuit of innovation," said MySpace CEO Owen Van Natta.

"Music entertainment is an important piece of people's lives," he told reporters in a conference call.

In a statement, iLike president Hadi Partovi said: "I'm enthusiastic about what this combination will mean for our users, artists, advertisers, and our staff.

"We are beginning an exciting new journey together."

The terms of the deal were not disclosed but the blogosphere has reported that iLike was sold "fairly cheaply" at about $20m (£12.4m).

MySpace has been working to overhaul its business into one more focused on global music and entertainment.

Mr Van Natta said he wants iLike to branch out from music recommendation into other areas like video, games and film.

Rivalry

It is not known how this acquisition will ultimately affect iLike's relationship with Facebook, which has been home to much of iLike's activity. It has been estimated that 80% of its traffic comes from Facebook.

"Now that it will be owned by Facebook's closest rival, there's a chance that Facebook could restrict or block the app," said CNet's Caroline McCarthy.

Screengrab of MySpace music page, AP
MySpace is behind rival Facebook in popularity

Mr Van Natta for his part told reporters: "In the short term users should expect the iLike experience to be unaffected.

"Our expectation is that social networks are going to be thrilled that we're making iLike an even richer experience."

In a statement to the BBC Facebook said: "iLike was one of the first applications to be built on Facebook Platform and has become a success with more than 10 million users.

"We expect that users will continue to discover and share music through the iLike application on Facebook."

The deal was not unexpected and had been heavily trailed by blogs like TechCrunch.

"iLike ultimately chose MySpace based partly on price, and partly on a fit with the buyer," said Mike Arrington founder of TechCrunch.com.

"Ongoing uncertainty over Facebook's intentions to compete with them (iLike) directly as well as regular changes to the rules around Facebook Platform mean they could get cut off at any time," warned Mr Arrington.



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