Social.FM, the three year old startup which helped users discover music through their social network in a similar manner to Last.fm, has confirmed it is shutting down. GigaOm carried a tip-off to that effect, now the site is carrying the following message:
To our Valued Customers,
We regret to inform you and apologize for this inconvenience, but Social.FM will be shutting down the system on July 31st, 2008.
The Company is unfortunately no longer in business and therefore cannot continue its service to you.
Regards,
Mercora, Inc.
Social.FM was the re-branded Mercora, which launched in June 2005 and raised $5 million from Norwest Venture Partners with the idea of selling ads next to music searches on its P2P network. But competition from Pandora and Last.fm made it change its strategy towards a social network. Social.FM may also have suffered from the huge jump in royalty rates for webcasting music.
Its Compete graph says it all:
The company won a deal with Microsoft last October which saw it join the Microsoft Mobile2Market Program which promotes “Designed for Windows Mobile” applications. But since all the interesting music action is really on the iPhone - and Last.fm’s iPhone application totally rocks - it looks like Social.FM’s app wasn’t going to get much use. Last.fm was last year sold to CBS for $280m and has since re-designed and switched on an aggressive play against music labels.
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5 million? And they never broke 12,000 folks?
I really need to learn more about how to attract venture captial! I’ve put together a similar type of site, thus far all just development time for me. Had I more time (darn day job), I’ve got a ton of more ideas.
http://www.madtownlounge.com
some VC companies can afford to lose. northwest would not have invested if they couldnt afford to lose. its all part of the VC gamble game. at least it was not grandmas life savings. There you would have a legitamate loss. I would love to hear more common sense commentary about the bubble some internet companies are in.
WeDontNeedAnotherWebsite.com - we have enough to work with.
I wish TC would be more upfront and warn the others that there is not alot of light for any startup competing in the space. We are at an apex of innovation. We need integration. Who is or will be the Master integrator of the internet.
I see.
From 912K RSS readers to 850K now. Deadpooling soon.
It’s summer…
It’s normal to have less readers in TC…
I’ve said it before and I’ll say it again…any online music service playing by industry rules is doomed to failure.
http://www.snuzu.com
How sad ! I am just developing my start-up for january, its important to see the level of the market through those sad example. Thanks for digging the low sticks.
Sad news for start uppers… I guess it is good to know about the sad side of the market. See
Sad
Very sad to hear they shut down. A great alternative to them and last.fm and also a new start-up company is http://www.maestro.fm
not good. is it 90% of startups that fail in their first year? cant remember the figures
ouch, Norwest has been investing in some real duds lately
If memory serves, the developer that created Shareaza was hired by Mercora. He created his own open network that he called “Gnutella2″ and brought numerous innovations to p2p search. It’s sad to hear the company didn’t make it afterall.
I was working on a music site but backed off because there are just too many already out there, and very few if any of them have figured out a way to become profitable business. Last.fm, imeem, Pandora, and maybe a couple of other sites with music content will make it, but how many more can there be? Plus you have Youtube, Myspace, Yahoo, Amazon, Ebay, Apple etc. all of which have a lot of music content to browse through. Where is there room in on-line music for anything else right now?
Mike, Pandora’s iPhone App totally rocks too, I’d like to add.
btw, speaking of deadpool… I went looking around for hotswap.com and they launched on TC in July 2007 with great fanfare, Woz investing, and the site is gone, and not one piece of news on them after Oct 2007… this these guys implode or get acquired or wtf?