There’s lots of speculation out there on the yet-to-be-closed MySpace acquisition of iLike that we first reported on Monday.
Much of that speculation is factually incorrect, we’ve confirmed from a source close the the deal. iLike, which has been profitable for over a year, had multiple offers to be acquired.
Our source says that, in addition to MySpace’s offer, both Facebook and Amazon submitted bona fide written offers to buy the company. At least one other large company expressed interest to Allen & Company, iLike’s advisors to the deal.
Activision Blizzard and Microsoft have been incorrectly rumored to have been seriously interested in the company, however.
iLike ultimately chose MySpace based partly on price, and partly on a fit with the buyer, sources say. Facebook was largely off the table due to building distrust between the companies.
Also, multiple sources tell us that the deal negotiations with MySpace have been moving along quickly and are now virtually complete. There was no last minute canceled iLike board meeting (in fact no board meeting was scheduled), and no hiccups over tax issues on the deal.
“People are literally making this drama up,” said one source.
It’s also clear that the relatively low valuation that iLike commanded in this sale was due less to their performance and more to uncertainty created by Facebook over their future on the Facebook Platform.
iLike is profitable and has 50+ million registered users. Unlike other music services they don’t have crushing streaming payments to make to labels because, well, they don’t stream music.
They are certainly now in a position to stand on their own as a company over the long term. Except that ongoing uncertainty over Facebook’s intentions to compete with them directly as well as regular changes to the rules around Facebook Platform mean they could get cut off at any time.
In other words, this is less about iLike’s financial and user growth and more about the value of users from Facebook Platform. Facebook seems unwilling to let Platform partners get too big. There continues to be no clear line as to where Facebook’s internal apps end and Platform begins.
We continue to expect the deal to be closed and announced shortly. And we eagerly await Facebook’s response to their main competitor, MySpace, suddenly owning (the de facto) Facebook Music.
I don’t use iLike anymore. I use http://www.flybymusic.com. The interface is so much better and the user experience is awesome. It’ll be interesting to see what MySpace does with iLike in the months to come.
Your website doesn’t look so bad, but it’s celarly an unfinished beta version.
You can’t stop a song being played when browsing other tabs of the site, you can’t seek in the song, browsing music is not so intuitive…
that’s a pretty cool site, I think techcrunch should write about it..a lot of people would probably be interested in something like this.
Actually, i’m pretty sure more people want to hear about this than facebook screwing it’s ex-employees over stock options…
and it’s not some 1/2 baked splog!
I think Facebook or the amazon would be the best option for iLike’s brand value than MySpace!
I think this is probably a dump & run deal for iLike’s founders. MySpace/FIM is not the place to innovate & increase or maintain brand value. Look at other MySpace/FIM acquisitions, like Photobucket & Flektor. Your brand quality & innovative edge go by the wayside.
Keep an eye on this new multi-media search engine launching soon.Heard about it and it looks promising.
It will be connected to all mobile networks worldwide(source of revenue) and partnering up with the biggest brands known to mankind,interms of revenue this will be the biggest on the net.Can’t wait to see how this turns out.See demo site below:
http://www.yaffflezone.com
First you misspelled the url of your own site, and then secondly when I corrected it I was taken to the biggest POS I’ve ever seen. Well Done.
+1
Pretty incredible. Every time I think I am over the social networking industry, something like this happens and it becomes intriguing.
Its amazing to note how rumors swing this and that way. Waiting eagerly to see what will finally happen to iLike. If MySpace buys it, then it would be a hit at Facebook for sure.
Why sell at a firesale price if you’re profitable? This deal stinks.
The article clearly explained why.
Pay attention.
and lots more to come.
Actually I’m with JD. The article states iLike is profitable… hence they don’t need to sell.
So yeah, their future with Facebook is in doubt. But the valuation is crappy. Since you aren’t burning cash, why not let it ride a bit and maybe change strategy to see if you can come up with a different outcome?
If their future on Facebook is uncertain, then wouldn’t the best option have been to sell to Facebook? Now Facebook will compete with them for sure, and will probably make things very hard for iLike to continue to thrive on the Facebook platform.
And as for the Facebook platform not wanting partners to get too big, and making things uncertain for developers, I want to concur that this is 100% correct. I haven’t met any developers who wouldn’t agree with this. Facebook keeps screwing over developers and changing their platform (when they are not breaking it) and overall it’s been very hard for businesses to keep their applications strong.
you mean sell to the guys who screwed up your business?
It doesn’t explain the bias by Techcrunch? Angel investor? School chum?
Did you even bother to read the whole article, it clearly says the price was due to the uncertainty of ilike on the facebook platform…
cool story
BULLLSHIT. It’ll take a fucking Armageddon and one to justify such a crappy valuation.
I’ve been an iLike user for well over a year. Integration with Facebook Platform was always slow at best and over time it got a little bloated. Still, I’ve always been ever faithful.
Seeing as it’s the defacto music application, other then embedding youtube videos, I really dont’thave much of a choice when it comes to Facebook. Will this pull me over to Myspace? Nah.
I don’t know how much this will change things on Facebook, if at all. It’s a still a great application for attracting new users to iLike and there’s most likely a dedicated team just for that alone.
iLike making the decision to settle with Myspace is in fact a wise move for both of them. Myspace has been, for a long time, a place where many artists share and take roots with their followers. Couple that with garageband.com and you have a very powerful mix. Yes, it fit’s into both models quite well.
Is iLike days numbered on Facebook? Not likely. In fact, it’s an interesting backdoor way to get new users onto Myspace from within Facebook itself with more social media sharing options built within. Application Platform guidlines may prohibit or limit this activity, but it’s certainly interesting to think about.
Facebook Platform is very restrictive with it’s music applications (iStore anyone?) and it would be a huge loss to Facebook if iLike decided one day to pull out because there’s litterally nothing that can currently take it’s place.
I dont think there is any question as to whether o not iLike would leave FB… of course they wouldn’t. The question is to how differently FB will treat them once owned by Myspace.
Facebook could fairly easily replicate the music features that myspace has had for years that make it the defacto home page for many artists – make the music player a prominent element on musician webpages and allow users to easily feature their favorite songs on their profile. They also need to give artists a dedicated space for highlighting their tour information. If Facebook wasn’t staggeringly mediocre in the music space, the ilike sale would be a non-issue.
There may be uncertainty around Facebook users of iLike, but on the other hand, iLike would never have gained so much traction so fast without the Facebook Platform.
Hey Mike,who owns Yafflezone?I’l admit,their logo is prity sad but seems like they have got an impressive business model.
When are they launching?Mike,can u please find out and report on it.
http://www.yafflezone.com
Die.
Yafflezone.com? First the name is gay and secondly after going there what a POS. Can’t you Aussies do something better than a glorified torrent site?
dude(yafflezone)come on!it’s obvious you work for the site thats if you are not the founder.good business model thou
Hey Mike,who owns Yafflezone?I’l admit,their logo is prity sad but seems like they have got an impressive business model.
When are they launching?Mike,can u please find out and report on it.
lol. yeah, that’s not transparently spammy.
what exiting to know is that many of the social bookmarking site features a lot of things that will surely its user will enjoy using it.
First, for a company w/ 50 million users and profitable to be valued at $20 million is a sad state for entrepreneurs. Second, FB putting the screws to a highly successful FB platform company is just as sad. This clearly should be a situation where FB should step up and say to a platform partner, you are valuable to our FB Users, therefore you are valuable to us, and we will gladly acquire you for FMV (at least more than MySpace). We all know that distrust may be an issue, but the decision-makers are all about maxing out the acquisition price. Last, FB and Apple have both spit in the eye of their platform partners. This is the sad reality of building on others platform.
I guess at $20 million no one made money but the investors.
I believe the return for investors at that valuation is pretty poor. Not the multiples they would have been looking for when they first got involved.
Mike, awesome breakdown…would be nice to see you adopt a policy like Paul C. where you out the folks who gave you the incorrect information in the first place.
Rather I would like http://www.clownbasket.com
As far as iLike is concerned FaceBook would be the best fit. MySpace will bury iLike in time. Dont sell it to myspace.
FB is a business. If they think iLike or any platform developer has something they want (value, user attention, etc), they can kill them and build a replacement or make their life hard so users go looking elsewhere for a better solution which FB conveniently builds.
In reality, iLike’s 50M users could drop 90% or so if FB decides that they do something wrong and blocks the app. There’s a risk, plain and simple.
So wait, they didn’t sell to Facebook because they thought Facebook would cut them off, and treat them as a competitor, so they sold to Facebook’s biggest competitor?
What? Where’s the logic in that?
I actually think this is win for everbody.
MySpace Music will get a new bump in a capable team with an eye on better music services.
iLike wins in that they will now have access to streaming music and be able to do some really great social things.
FB will likely go out an find another source for a social music app, and hopefully get full track streaming in the deal.
iLike is really an amazing website. I personally like it. They have really impressive content and features. Facebook and Amazon really consider it. Great info