In the previous days, popular music-based social network iLike had announced to music fans that it started to sell digital music. According to recent news, the world’s largest social network MySpace quoted $20m for iLike, which went beyond itself with this last move.
As an old iLike user, I would say that iLike, which enables users to find friends having common musical tastes, and the artists to create their own fan page and contact with their fans on digital media, has been moving with a beautiful vision since the first times of it.
Acclaimed by its users, the service had self-improved itself thoroughly in May, integrating artist pages with Twitter, Facebook, MySpace, YouTube and Ticketmaster, and enabling them to do the management via iLike. In addition, premium account had made it possible to view the performance of the accounts and map of fans. Moreover, iLike had quoted only $99 for creating a special iPhone application for the artists. In short, with this management system, iLike satisfied not only members, but also the artists.
A few days ago, iLike announced that it started to sell digital music, thus opened the door for huge profits by adding mp3 sales to its services with prices between $0.89 and $1.29. Therefore, one of the world’s largest social networks MySpace can’t remain indifferent to these kind of initiatives, and the deal, if made, will be MySpace’s first acquisition since new CEO Owen Van Natta took control of the company in April 2009. According to information leaked from a few sources, the acquisition that can be done this week will be for like $20m.
What are MySpace’s expectations regarding iLike?
Currently MySpace Music is in the first place in its own field and his closest follower iLike. Founded in the end of 2006, iLike has 50 million registered users and a large Facebook audience. As of today, 10 million Facebook users are using iLike application, which might be a good way for MySpace to enter into Facebook.
If we recall that CBS acquired Last.Fm in 2007 for $280m when the website had 12.9 million individual visitors per month, the price quoted for iLike that has 3 million individuals does not carry the parallelism. It is that way because it seems more reasonable to estimate cost per member for social networks. However, when we consider Last.Fm’s acquisition for $280m cash when it had 15 million active users in 2007, iLike with more than 50 million registered users seems to be underpriced. In my opinion, it is possible that the leaked information concerning the estimated value is not very correct regarding iLike, which got $16.m investment, and if we take iLike’s future plans into consideration, I can say that MySpace wants to get iLike at a low price.
In any case a purchase will not affect our comments, so I recommend that artist who would like to have iPhone application hurry, since it will jump from $99 to $195 in two days with all its integrations.