The iMeem acquisition isn’t yet finalized, we’ve heard from sources, and awaits approval from various stakeholders.

We don’t know the price of the acquisition, but this isn’t going to be a big win for investors. iMeem has raised at least $25 million (that we’ve been able to track) plus at least another $10 million in debt. But the difficultly in making a free streaming music service work as a business model forced them to make some hard decisions. Earlier this year they renegotiated label contracts and recapitalized the company, bringing in $6 million in fresh capital.

iMeem found a way to survive a few more months. But now they’re under the financial gun again, we’ve heard, and investors aren’t willing to put more capital into the company. But MySpace is stepping in to acquire the company.

What’s in it for MySpace – the acquisition of a seasoned team with lots of experience in music. Plus the iMeem and SNOCAP intellectual property. It’s not clear if the iMeem brand will live on, but iMeem users will certainly be welcome at MySpace, I’m sure.

This is another blow for free streaming music lovers. iMeem and MySpace Music were among the last free streaming services in the U.S. And MySpace Music, we’ve heard, will soon be forced to turn to subscriptions to manage costs.

iMeem was founded six years ago by then 23 year old Dalton Caldwell The first product was social networking via a client application that included file sharing, status messages, etc. It morphed into a music streaming service over time. According to Comscore, iMeem had 16 million unique visitors worldwide in September.

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Did Facebook finally unfriend iLike? It certainly looks that way. Facebook is restricting iLike from showing people’s music data in their profiles (the songs and artists they like) or alerting them to upcoming concerts through Facebook notifications. The ban on notifications appears to be part of Facebook’s recent moves to fight app spam. It is not clear what music data specifically will be pulled from profiles, but that could cover all the data iLike collects about users—their music preferences and recommendations.

Even though iLike is the top music app on Facebook, with 12 million active monthly users, the two companies have been on the outs ever since iLike was picked up for a song by arch-rival MySpace. The recent deal with Google Music to show iLike/MySpace Music results added insult to injury.

This morning some people with the iLike app installed on Facebook received the following notification:

Due to upcoming Facebook changes, your Music data on Facebook won’t show on your profile and you’ll stop getting concert alerts. Take this step to save your music data

To get around these restrictions, iLike is now asking for users’ emails so they can send them concert alerts (which can be a very lucrative source of affiliate revenues) outside of Facebook. But routing these types of alerts through email is not ideal. People don’t want app spam in their inbox.

The app inside Facebook is currently “taking a short time-out for maintenance.” I have asked iLike, MySpace, and Facebook for clarification on the changes, and will update this post when I hear back from them. A few weeks ago, Facebook’s Ethan Beard hinted: “We are making some changes to the profile. We think it should be a great place for users to accurately represent their identity.” Perhaps this is related.

Update: This notification is indeed in response to changes in Facebook’s developer roadmap, which will eliminate two of iLike’s top features: adding music to a profile and personalized concert alerts. So iLike trying to get users to switch to email notifications (outside of Facebook’s control) and new profile tabs. The policy changes are not targeted at iLike specifically.

A Facebook spokesperson clarifies: “We didn’t do anything specific to iLike as the headline implies, and alerts are not going away, they’re simply shifting away from their current channel to ones we think will be more effective for both users and developers.”

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MySpace is the big lottery winner here. They bought iLike for $20 million in August. What they got: a talented (literally) team that is starting to fill the executive ranks at MySpace, the biggest music application on Facebook, and, it turns out, a deal with Google that is now sending massive traffic flow directly to MySpace Music.

Our understanding from sources is that MySpace made an offer to iLike without knowing about the Google deal. Supposedly, since iLike was under NDA, all they knew was that iLike had a big partnership opportunity with some big company, nothing more. In hindsight the iLike deal looks smart even without Google. Add that in and it looks absolutely brilliant. I’m no fan of MySpace CEO Owen Van Natta, but I’ll give the man credit here.

Giving Facebook The Benefit Of The Doubt

Facebook decided not to aggresively pursue iLike. They seem to have firmly moved away from any desire to deal with content directly, so this looks less like a mistake and more like a strategic decision.

But one thing is clear. Facebook utterly failed to execute on their music strategy from last year, even while trying to work via a partner application to avoid direct contact with content. Meanwhile, Google stepped in and quickly brought streaming music directly to users, without paying anything at all for it.

iLike CEO and now MySpace exec Ali Partovi, speaking at the launch event last night, didn’t hold any punches against Facebook. He gave huge credit to Google for pulling off a win-win-win-win (labels, google, users, MySpace/LaLa) in the difficult online music space. And he noted that “others have tried or are still trying and have failed miserably.” He was quite clearly referring to Facebook.

The truth is that we don’t know if Facebook flailed on a huge opportunity to get into the Google search stream, or if they just decided they don’t want the hassle of dealing with music directly. We’ll give them the benefit of the doubt. And they certainly had no idea of the Google deal back when they were trying to buy iLike anyway.

Ticketmaster Flubs It

None of Facebook’s excuses (didn’t know about the Google deal, strategically not what they want, etc.) apply to Ticketmaster. The company was a big shareholder in iLike, had a board seat, and certainly new every detail of the Google deal. They could easily have acquired iLike, probably for not much more cash than the $13.3 million they already had invested. But instead they let the company go to MySpace, knowing full well that they were enabling a huge potential competitor.

If Ticketmaster had acquired iLike all that Google music search traffic would be under their control. Click throughs to the iLike site could be monetized through event ticket sales. It would probably be a matter of months, not years, before they got their investment back in additional ticket sales.

And what’s worse is that MySpace now controls all that traffic. MySpace actually has a much more complete worldwide database of concert events than even Ticketmaster has, and they already flow through a lot of traffic to ticket sales at Ticketmaster and competitors. Now that database is combined with iLike’s impressive concert discovery and alert product. When you plug Google search traffic into all of that, its got to be scary for Ticketmaster:

“MySpace has the world’s largest database of live events, and iLike has already built some of the world’s best concert-discovery features available online,” Courtney Holt, president of MySpace Music, wrote in a blog post. “We’re delighted to have implemented the first structured integration of concert data into Google search, and this is only the beginning of our efforts to innovate in the live event space.”

We frankly can’t see any reason at all for Ticketmaster to let iLike go to a potential competitor, particularly with this Google deal locked up. Ticketmaster CEO Irving Azoff certainly knew what was happening. So why did he make such a huge misstep? Possibly because he’s in the middle of a divestiture of topline assets as part of a merger with Live Nation. Azoff is rumored to be looking for a huge personal payout as part of that deal, and may even be spinning himself off along with assets.

In other words, maybe Azoff couldn’t care less about the future of Ticketmaster.

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Key takeaways – Google will integrate new partners as it makes sense. And while MySpace knew about the negotiations between iLike and Google prior to announcing their acquisition of iLike in August, the deal was far from certain. More on that in a subsequent post.

All are below:

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Here’s how the new feature will work: Onebox will let users stream songs directly from Google’s search result page, and will also include additional content like tour information and music videos (the actual content shown will vary depending on the partner — more on that later). Enter a query for “Use Somebody”, and you’re going to see a small ‘play’ button in your search result that lets you stream the Kings of Leon song in its entirety, or buy the song. Clicking on the play button will bring up a small browser window that will immediately start streaming your song. If you enter the name of an artist rather than a song title as your search query, Google will present a handful of popular songs by that artist with multiple ‘play’ buttons.

Here’s what the results page looks like, when multiple songs are being presented:

The new feature is being powered by two entirely different services: Lala, the innovative music site that lets people buy ‘web songs’ for ten cents, and iLike, the popular streaming music and artist hub that was recently acquired by MySpace. In an interesting twist, iLike’s appearance in OneBox will be short-lived — MySpace branded widgets will soon be taking their place. This is an important step in MySpace’s transition to being seen as a media/content hub rather than a pure social network. MySpace is also leveraging some of the new features it has recently rolled out since the iLike acquisition, including its artist dashboard and extensive library of music videos — you’ll be able to jump to a music video for a song directly from MySpace’s Onebox results (this is impressive given that the site only launched those services a week ago).

Likewise, this is also a massive win for Lala. We’ve been big fans of Lala since the site relaunched back in October 2008 with a unique business model that lets users build their music libraries in the cloud for cheap — you can purchase an entire streaming version of an album for around 80 cents, or 10 cents per song. The service’s only problem has been establishing traction, and this will certainly help with that. Expect the service’s userbase to see a big jump as millions of people on Google are exposed to Lala for the first time.

The joint partnership comes with a few quirks. Google will basically be doing a coin toss with each eligible query to determine which service will be serving up the widget. That will help the service distribute load and perhaps leaves the door open for Google to include multiple other music services, but I’m not sure it will provide the best user experience — some users may get confused when a feature in one widget isn’t available in the other.

Google VP of Search Products and User Experience kicked off the event,talking about how Google has expanded its search offerings over time, with Images (2201), Book (2003) and Maps (2007). “Music” is one of Google’s top ten searches of all time, as is “lyrics”. But it hasn’t always been easy to actually find music, which is why Google is looking to offer full song streaming directly from Google.

Google has also partnered with Gracenote to provide full lyric search — if you type in the lyrics from a portion of a song, they’ll identify the song. Song purchasing partners include imeem, Rhapsody, and Pandora, who will help with music discovery.

Google passed the baton off to MySpace, with MySpace Music President Courtney Holt outlining how much growth MySpace Music has seen and how happy the site is to be working with Google. Ali Partovi, iLike’s former CEO (and MySpace’s current SVP Business Development) took the stage, first taking the time to congratulate MySpace on acquiring iLike. He was joking, but what he says has some truth to it: MySpace made an offer on iLike before iLike could talk about the Google partnership, which iLike had been working on for a long time. In other words, MySpace lucked out with the deal.

Lala’s Bill Nguyen next to the stage, saying that Lala has always been about finding music, and then discovering more that you might like. He says that for the last ten years, music has been about business models, not discovery. Once you wind up on Lala, you can follow other users and see what they’re listening to.

The new feature will be gradually rolling out to users, with a small percentage (1-5%) having access today and rolling out gradually over the next couple days to everyone in the US.

Here’s the Lala player:

Here’s MySpace’s widget (you’ll be seeing an iLike widget temporarily, but eventually they’ll shift over to look like this):

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Matt Ghering, a product marketing manager at Google, has been one of the people talking to the big four music labels about the new service, we’ve heard from one of our sources. And he has supposedly sent these screenshots of the look and feel of Google Music search to various rights holders and potential partners.

The first screenshot shows how a search result might look on Google for a search for “U2.” A picture of the band is to the left of four streaming options for various songs, and the user has the option of listening via either iLike or LaLa. Click on one of the results, and a player pops up from the services that streams the song, along with an option to purchase the song for download.

We don’t know if this is the final look of the service, but it’s definitely something Google has been sending to people to show them what it might look like.

More thoughts on this later as we digest all the information coming in. But one thing is clear – this is a huge win for LaLa and iLike. Both will get massive flow from this deal. And as much as we criticize MySpace, their acquisition of iLike is starting to look sort of brilliant.

Search Results:

iLike Player:

LaLa Player:

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Or so we thought…

A new group of execs were brought in today. And among them are the cofounders of music startup iLike, Ali Partovi and Hadi Partovi. As usual, we peruse the MySpace profiles of new execs because every once in a while we find a new exec hire that hasn’t actually ever used the service.

All the new execs appear to have MySpace profiles. But just before I signed out of the last one i checked, Ali Partovi, a video he uploaded caught my eye. He says “Here’s a little video I just made for the MySpace sales conference next week (Oct 13-15). They told everybody, “make a video showing how MySpace is YOUR space”…..”

Anyway, meet your new SVP Business Development at MySpace, who is most definitely not buttoned up and boring. We’ve also added this video to his Crunchbase profile. Because we can never, ever let him live this down:

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MySpace acquired streaming music service iLike in August for $20 million.

Other recent MySpace hires include Mark Rosenbaum as CFO and Alex Maghen as CTO (he was formerly CTO of MySpace Music, now he heads technology at MySpace proper as well).

Below is MySpace’s bio about Stirratt, who served as EVP of Digital Advertising at MTV before joining MySpace:

Prior to MySpace, Stirratt served as Executive Vice President of Digital Advertising at MTV Networks where she oversaw advertising sales and strategy, ad operations, Digital Fusion-integrated marketing, and Tribes, the company’s third-party vertical affiliate network. Before MTV, Nada served as Senior Vice President and General Manager of advertising sales at Advertising.com. Earlier in her career, Stirratt worked in ad sales and business development for such entertainment brands as AOL-Time Warner, Moviefone, Allure and Cosmopolitan.

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We’ve heard that Facebook has been talking with the European startup about a partnership for well over a year (about the time the Facebook music rumors heated up), but that the talks have intensified dramatically in the last week.

And just as we were digging into that rumor, up pops a Facebook status message from Mark Zuckerberg: “Spotify is so good.”

Wondering about the timing? Don’t. Facebook investor Li Ka-Shing is now a big stockholder in Spotify, too.

And it was clear that as soon as iLike turned down Facebook and accepted MySpace’s offer, Facebook would have to make some new decisions on music strategy.

iLike has always been the de facto music application on Facebook. A year ago Facebook named them one of only two “Great Apps” that would get preferential treatment on the platform.

But all that has changed. The Great Apps program was shuttered, and there’s no way Facebook is going to continue to shower the love on iLike.

So out with the old, in with the new. See ya, iLike. Helloooo, Spotify. So when are you launching in the U.S.?

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Music plays a large role in our lives. Since the web now plays an even bigger part, combining the two together has become unavoidable. The greatest thing about this powerful duo is that you don’t need to spend a lot of time searching for music you like  — just use this nifty guide list and you’ll find just about everything you need to enjoy hours of good music. The sound quality changes from service to service, but overall, it’s good enough for regular web usage.

Please note that this is a list of services that you can use over the net without the need to download anything to your computer. This is why I’m not listing any P2P software: i.e., Spotify, as well the fact that most of us can’t really test it or use it for all that matter. This is also only the first half of this guide; part two will include more web music players (including MySpace Music, Streamzy, and others) as well as music search engines and services that make it easy to share songs on Twitter and other social sites.

Music Recommendations:

Pandora is a service that can be used only in a specific locale, this one being within the U.S. Luckily, I had the chance to test the service when it was first released and became available to everyone. Launched way back in July 2005, the project had been in the initial testing phases for five years prior to launch date. Pandora recommends music to you by matching similar musical attributes. All you really need to do is choose an artist or a band you like, and Pandora will do the rest. Pandora delivers high quality 128Kbps audio streams, offering recommendations similar to the artists you have chosen. Pandora’s player looks like a radio, you can open up to 100 stations and navigate through them quickly. Registering for Pandora will provide you with a free account (advertising-supported). Free Pandora accounts will play up to  40 hours of music for free per month, you also have the option to pay 99 cents for unlimited listening hours for the rest of that month, or pay $36 to upgrade Pandora for one year. If you want to download music from Pandora, you can do it through iTunes or Amazon. You can see our past Pandora coverage here.

With almost 3 million unique visitors a day, Last.fm is one of the most powerful social music communities on the Web today. Like Pandora, the service allows you to enjoy music that you like, but unlike Pandora, Last.fm analyses what you and your friends listen to and like, and then suggests more music based on that analysis. When you recommend music to a friend or you tag it, or you write about it, or simply just listen to it – you shift the song’s importance on the site, and will in turn get recommended to more people. Based on the music you’ve already listened to, Last.fm will recommend new music you might like, as well as suggest other users with a similar music taste to yours, which you might be interested in friending, and you can also easily communicate with them. If you live outside the U.S., U.K. or Germany, you can listen with a free 30-track trial or subscribe for a low price of $3/month for unlimited radio streaming. (Launched in 2002!)

This is how BlogMusik, looked in 2006, and this is how Deezer (formerly BlogMusik) looks today – pretty impressive change, don’t you think? The French-based service is one of the largest and happens to also be a very successful music recommendation search engine. Once registered here, you can create your personal profile and reach the Deezer community. You can create playlists, send messages to your contacts, leave comments, add artists and albums to your favorites, and more. But here’s what I like the most – The SmartRadio, which is an intelligent radio that automatically generates 3 hours(!) of continuous listening based on one artist – completely free. Priceless! You can see our past coverage of Deezer here.

I think the first Adobe AIR application that I ever tried was Finetune. Finetune provides you with the most interesting new playlists of related music from your choice of artists. Besides the site’s community where you can browse, listen to music, create a profile, connect with other users and more, Finefune also has some cool feautures to complete their suite, and each tool gives you an extraordinary music experience. Take for example the Finetune Wii project (which can be played also over the web), it’s a great sight and sound for the eyes and ears. Just enter an artist’s name and Finetune will create a playlist with similar music that will play for hours. Best of all it’s free, and you also get an iPhone, Facebook and a Desktop app that all sync with your music playlist, no matter where you play it from. You can see our past coverage of FineTune here.

Also worth mentioning in this same topic group are, of course: Ilike.com (acquired by Myspace), and music.strands.tv

Independent Music:

Amie Street is a home for musicians. The service allows music fans to discover new and independent music. Visitors at the site can search for new music based on genre, region, or recommendations. Fans can also search for music according to its price -  Amie Street is actually the only marketplace where listeners determine the price of the music. How does it work? Every song is originally priced free or very inexpensive and increases in price, up to 98 cents, as more and more users purchase it. Musicians then get 70% of the revenue from each sale. Additionally, Amie Street matches you with music that you might like, for example: I couldn’t locate Coldplay on the site, but I got more than 70 results that sound similar to the band. Obviously, this exposes me to music that I’ve never heard before, which is always a welcomed experience. You can see our past coverage of Amie Street here.

Why is Jamendo one of my favorite music services? It offers the largest catalog of music under Creative Commons licenses – worldwide. And, not only are all of the albums free to download, there’s also a large chance you won’t know any of the artists. If you already have an open mind about music, surely it won’t stop you from listening to some new albums, right? The best way to find music at this site is to search by the genre tags. Found something that you like? You can review, comment, rate, share and as I’ve said download it for free.  The service is available in seven languages, and has an iPhone app that you can download for free. Business model? Yes they have one too.

SoundCloud is by far the best looking music application there is today. It offers a great interface, a great user-experience and above these all, great music! SoundCloud lets music professionals receive, send and distribute their music. The service allows professionals (and non-professionals) to exchange, and follow music and musicians at the site. It’s a full community where people can easily communicate with each other based on shared tastes, but it is also a place where musicians can store and showcase their music using high quality standards. With the free account, you can only upload 5 tracks maximum per month, but if you are an industry fanatic and you find this plan to be somewhat lacking, you can check the pro page for packages that are more suitable to your needs. See our past coverage here.

TheSixtyOne allows artists to upload their songs and lets thousands of listeners decide whether they like it or not. The most popular songs hit the front page. Think about it as a Digg for music, the more people heart a song, the higher it goes. The site connects musicians and fans, giving them all the tools to communicate with each other. For artists, it’s good place to promote their work. For anyone else, it’s a wonderful place to discover and support new music.

Create & Listen to Playlist:

I’ve never been very much of a Project Playlist fan, but I have to say it’s a good service. Ultimately, it’s a community based on playlists. You don’t have to register to be able to listen to the music, but once you do, you can start building your playlist and enjoy more features such as the Playlist IM, which is a chat system similar to Facebook where you can connect your ‘playlist’ friends or even friends from AIM, Facebook, Yahoo Messenger, etc. What else? You can write blog entries, upload photos, privately connect with other members, browse thousands of other music playlists, comment, share, and much more. My guess is that people use this site mostly to share their playlist on their blog/site or social network. Playlist allows you to grab a playlist code and embed it anywhere you want. One thing that bugs me though is that the member’s search feature is missing. Today, when everything is so connected to your identity, this is a must have feature. On the other hand, I was impressed to see they saved my playlist from 2006…

Jiwa.fm allows you to create personalize playlist and share it in the Jiwa.fm community or with friends & family. As a member, you are able to share, exchange, and explore music. You can also expand your tastes with the SmartRadio tool. I found this service to be unique in a way because no matter what you are doing at the site, it won’t prevent you from listening to your playlist, it just plays in the background. Amazingly, when you click on an artist from within a mixed artists playlist, it will automatically create an album playlist of that artist. You might find the site to be a bit cluttered at first time, but once you get it, it works like a charm – highly recommended.

At Jogli, you don’t really need to create a playlist – they create it for you. Think about it as a giant web-based CD store where you can search for an artist, see all of his/her albums, and then listen to them exactly as listed in original CD  Let’s take Michael Jackson for example: Here you can find all his discography, and listen to his CDs one by one. Clicking on the button ‘Play Radio’ will open a radio station generated from music you might like from similar artists. As a registered member, you are able to save playlists, write reviews, and more. You can also import your playlists to Last.fm or iTunes to make it a video playlist. Check out our past coverage of Jogli here.

MixTube would have been better and easier if they allowed you to search for Youtube videos on their site to create a playlist. But no, you have to supply them with a Youtube URL, which means, you’ll have to go directly to Youtube, search for a song, then copy-paste that song URL back into MixTube. Thus, I found it to be frustrating. But looking at the bright side, you can always search for someone else’s playlist, and save yourself time and agony. One word about the Youtube music integration – lots of services use it, but unfortunately, it doesn’t offer you much control of your playlist, and what plays today, may not play tomorrow..

Lala is another great music store/playlist maker that we’ve covered extensively since the site relaunched last year. It allows users to listen to any song they want one time. If you want to listen to a song more than that, you buy a 10 cent ‘web song’ that lets you stream the song from the cloud as many times as you want (you can also purchase a full download of the song as you would from iTunes or Amazon). The site has a great integrated music player and a variety of pre-made playlists built by other users.

Worth mentioning: Imeem, and Maestro.fm

Music Visualization:

There’s no doubt in my mind that Musicovery has a strong following of avid users. The site is an interactive and personalized webradio enabling its users to generate in a few clicks a musical program adapted to the various listening situations and their preferences. Their unique mood matrix proposes a relationship between music and mood in an ergonomic and attractive manner. I’ve submitted this item about the service to Digg in 2006 and it’s good to see the site still works . But things have changed. You have limited navigation if you’re not a pro user ($15/3 months or $48/12 months), but once you are – the sky is the limit. In any case, this service will blow you away.

CitySounds.fm is perhaps just a mashup site, but it’s a good one! CitySounds.fm collects music from SoundCloud and pictures from Flickr to create a wonderful music experience from a single page. You can listen to the latest music from cities all around the world. At the top are the most active cities and the list is constantly changing as new music is being created.

Web-Radio:

Very similar to Last.fm in concept, Jango allows you to create your own custom radio stations and share them with friends. Just type in what you want to hear – and your station will immediately play the music you want along with similar favorites of other Jango users who share your tastes. You can customize your stations further by adding more artists and rating songs. Each artist get a page, containing the web-radio, the music playlist, biographies, events list, comments from members at the site, and fan list for easy communication. The service claims to be legal and says it pays royalties due to all labels/artists every time a song is played. Moreover, Jango runs a program called Jango Airplay. This program gives emerging artists an unprecedented opportunity to be proactively exposed to the millions of visitors at the site. See our past coverage of Jango here.

RadioBeta is an efficient way to locate radio stations in your area or around the globe. You can search stations by geography, genre, band, language or tags. You can listen without signing up, or you can log in and create your personal dashboard with favorite stations that  you can then listen to on a daily basis. We mostly hear radio on the go, but now you can easily track your favorite radio stations on the web. All the radio stations are public so you aren’t asked to pay anything to use the site.

OK, TheRadio is also one of my favorites because of its simplicity. Entering an artist or a genre gets you custom channel, but if you go over the channel listing, you will find much more interesting suggestions. I don’t know about you but I actually like when someone else picks the music as long is it in the range of my request. Anyway, TheRadio does a great job on finding music that I like – it simply works.

Aupeo fits in the Recommendation list as well as this category. The service lets you experience music in a fours different ways: by Stations, Artist, Mood, and Personal. The Stations area is pretty limited if you don’t have a pro account, but you can still get the feel of it. In the Artist zone, you enter your favorite name and choose from a variety stations suggested. The coolest way is the Mode area, which plays music based on your chosen mode. These stations are created by music experts, says Aupeo.  The Personal station streams music based on your music behavior at the site. Overall, very intensive and powerful!

Worth mentioning: Tun3r, Mugasha, and  Play.fm

That’s it for Part 1 of this music guide. If you have any other suggestions related to these groups, you are more than welcome to add them in the comments. In the next part of this post, I’ll offer the best options for Music search engines, Music web-players, Twitter-Music craziness, and more. Stay tuned!

Image by RossinaBossioB on Flickr.

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As expected, MySpace has confirmed that it bought iLike. It is not disclosing financial terms, but our information is that it was around $20 million.

During the conference call, Van Natta stressed the importance of music, open content distribution, and talent as the main drivers behind the deal. He also put to rest misinformed speculation that there was any delay in the deal due to tax issues or a canceled iLike board meeting. “I have been doing deals for 15 years now, and this was one of the smoother sailing deals,” says Van Natta.

Both iLike’s employees and management team will now work for MySpace, but will remain an autonomous unit based in Seattle. Throughout the conference call, Van Natta’s first, he stressed his desire to make MySpace as open as possible and he cast the iLike acquisition as complementary to MySpace in that it is a distributed application across many social networks. “People want to interact in many places. We will take that strategy and apply it across the Web,” he said. Later he reiterated, “The thrust of this is distributed web, how can we serve users in a more distributed way.”

The implication, of course, being that rival Facebook is not so open (although Mark Zuckerberg would beg to differ). Van Natta couldn’t hep but give his former employer a not-so-subtle dig: “We are a much more open network. People can explore each other interests, much more so than on other social networks.”

One of the big questions around the deal was why isn’t iLike becoming part of MySpace Music. Van Natta addressed this issue by suggesting that iLike’s recommendation system will be applied to other content on MySpace, including videos and games. He also confirmed that there are no plans at this time to introduce music streaming from MySpace Music into iLike, but he did say that the two businesses would work together to grow the event ticketing business.

My full notes are below (I’ve bolded parts for emphasis):

Owen Van Natta: This is the first time I am speaking with you since taking on the role of CEO a few months ago. In that time we have restructured and hired some talented people. This is an official announcement that MySpace has entered into an agreement acquired iLike

This decision based on 3 things:

1. need to innovate. Music is part of people’s lives. We strengthen our ability to innovate in this area.

2. shared belief in open content distribution. People want to interact in many places. We will take that strategy and apply it across the Web.

3. Great people. Expect to see continued news about great talent coming to MySpace.

MySpace is a place where people can broadcast, discover, and express themselves. Where culture gets defined through social experiences around entertainment. By combining two models We believe that what iLike has created is not limited to music, can be extended to video and games. Because we see it as bigger than music, we are making this apart from MySpace Music.

iLike’s founders (CEO Ali Partovi, President Hadi Partovi and CTO Nat Brown) will remain and will stay in Seattle. In addition 26 employees joining MySpace.

Q&A

Q: Any guidance on new applications we can expect?

Owen: We will take all the great things iLike has meant for users and extend all the things MySPace does with users and extend that. You will be able to see a broader experience.

Q: How is this purchase going to affect iLike’s partnership with Facebook?

Owen: iLike is part of many social networks. My expectation is that social networks will be thrilled that we are going to be making iLike an even richer experience in their environments.

Q: deal terms and how integrated into MySpace music

Owen: We have not disclosed deal terms. iLike has a great product we will continue to extend, a phenomenal management team. Allowing that team to operate autonomously is an important part of it.

Q: reports that iLike was poised to offer its own music store? Is this a defensive move to shortcut that?

Owen: No, the thrust of this is distributed web, how can we serve users in a more distributed way.

Q: Will streaming from MySpace Music be offered through iLike? Also there was speculation that the deal was delayed because of tax issues or a canceled iLike board meeting. Can you comment on that?

Owen: first Q about extending MySpace Music into iLike, we have no plans to do that at this time. On your second question, I read some of the reports, I have been doing deals for 15 years now, and this was one of the smoother sailing deals.

Owen: No delay

Q: Update on MySpace music

Owen: MySpace music has been doing extremely well, 1,000% growth since launch, 200% year over year in usage. It will continue to serve users for many years to come.

Q: What does MySpace get from iLike?

Q: For example,If you look at the recommendation engine that users get on iLike, that is something you could apply elsewhere in MySpace. iLike is a big generator of ticket sales, something MySpace Music has started, that will accelerate, a better experience combined than either could on its own.

Q: If iLike develops its own music store, will that hurt your relationship with Amazon?

Owen: No, we don’t expect it to. iLike has just launched an MP3 purchasing functionality on its platform. Clearly users are buying music in a number of different ways. We want to serve users

Q: Would there be better margins?

Owen: What we are really focused on with MySpace Music, and iLike is also, is the discovery, and the socialization around that content. We are a much more open network. People can explore each other interests, much more so than on other social networks.

Q: Will iLike management team have any broader role?

Owen: First and foremost we want to make sure we don’t disrupt anything they are doing. They have a lot of things in development. This is a very talented group of executives, and the entire team. leveraging that talent more broadly across MySpace is something we will definitely pursue.

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MySpace just sent out an advisory that it will be holding a press conference shortly at 11:45 PT. CEO Owen Van Natta will be making an announcement (which , incidentally, will be his first public statement since taking over last April).

MYSPACE announcement—PRESS CALL INVITE

WHAT: MySpace invites you to attend a press conference call today to be briefed on breaking company news.

Could this be the official announcement that MySpace is buying iLike, the acquisition that got away from Facebook and Amazon? That’s our guess. Deal negotiations were progressing smoothly last we heard.

What we want to know is what will happen if Facebook now decides to cut off iLike, which is the most popular music app on the rival social network.

More details soon, as we cover this live.

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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.

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The Facebook Angle

This is by far the most interesting angle to the deal. iLike is the most popular music application on Facebook, and is the de facto Facebook Music app. That company will shortly be owned by MySpace, Facebook’s primary competitor. That puts Facebook in a lose-lose situation. They can let iLike continue to dominate the music scene on Facebook and let MySpace own all that. Or they can ban iLike and lose all credibility with their platform – everyone would know iLike was banned because of the acquisition by MySpace. And it doesn’t have to be an outright ban. Facebook has plenty of subtle ways of trainwrecking an application they don’t like. Keep an eye on this.

Why didn’t Facebook just buy iLike? A matching or slightly better offer than the $20 million MySpace is paying would likely have gotten the deal done. And it may have saved Facebook from an embarrassing situation.

If I were MySpace, I’d focus on getting their free streaming music into the iLike Facebook application as soon as possible. Advertisers will love it.

This deal also shows what a top Facebook app is worth. Most of iLike’s activity comes through Facebook. They have 10 million monthly active users, and 31 million total Facebook installations (iLike has a total of over 50 million registered users). MySpace has valued that and the rest of iLike at $20 million, but has to factor in the possibility that Facebook will derail the application, subtly or overtly. If that risk wasn’t there, my guess is iLike would be worth 2-3x as much.

Why is MySpace and not MySpace Music buying iLike?

We’re hearing two reasons.The first is that MySpace Music, a joint venture with the music labels, isn’t going too well. The venture will lose at least $20 million this year on the back of massive royalty payments to the labels, and when the Google search deal ends next year the financial prospects of MySpace Music may get much, much worse. The last thing MySpace wants to do is put good money after bad and throw more assets into MySpace Music. Plus, the deal would likely have required notice to, if not the approval of, the label partners who own equity in the joint venture.

There’s another reason being talked about by our sources as well, though. iLike isn’t just about music and music recommendations. The platform they’ve built to facilitate artist-to-user publishing and user-to-user recommendations can be used for content beyond music, such as videos and games. Our guess is MySpace intends to integrate iLike’s technology into more than artist pages. So having the assets at MySpace makes sense.

MySpace Now Has Its Own Music Download Deals With Labels.

iLike launched its music download store last week. MySpace Music has streaming rights to music but not download sales rights. Today Amazon powers MySpace Music downloads. I’m sure MySpace is now considering (or already decided to) moving to a direct sales approach via iLike’s deals and software.

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iLike, which launched in late 2006, is a social music recommendation service that now has more than 50 million registered users. It tracks what you listen to and like and gives you recommendations on new music based on that data as well as what your friends are listening to. It is the top music application on Facebook, Bebo, Hi5 and just about every other social network other than MySpace, which has MySpace Music.

iLike also hosts band pages which are second in popularity only to MySpace Music. By acquiring iLike, MySpace solidifies their already leading position as the most popular online identity for bands. Last week iLike also launched their own music download store.

Details are still flying in, but at first blush the deal is particularly interesting for two reasons.

First, simply because iLike is so deeply integrated into the Facebook experience. Nearly 10 million Facebook users use the iLike application every month. And iLike has also been a key part of Facebook’s ongoing struggles with what-to-do-about-music. MySpace is now going to own this.

Second, it’s MySpace, not the MySpace Music joint venture with the music labels, that is acquiring iLike. We’ll have more to say on this shortly. We’re hearing that a key driver of the deal is the iLike team, particularly founders Ali Partovi, Hadi Partovi and Nat Brown, and the underlying technology.

Competitor Last.fm was acquired by CBS in 2007 for $280 million. June 2009 Comscore stats show Last.fm with 12.9 million monthly unique visitors. iLike had just 3 million monthly unique visitors, but that doesn’t take into account the massive usage of the service on social networks.

The company has raised a total of $16.5 million from the founders, Scott Banister, Bob Pittman, Vinod Khosla and Ticketmaster to date. But their last round of funding was in 2006, where Ticketmaster put the bulk of the capital in via a third round of financing that valued the company at a whopping $53.2 million.

In Q4 2008 Ticketmaster wrote down a number of their venture investments, including a $5.8 million charge for iLike. Internally, they valued that $13.3 million investment at just $7.5 million. Last month we reported that iLike was considering a new round of financing that would cash TicketMaster out of the company.

Neither MySpace nor iLike would comment on this story.

Update: More thoughts on the deal here.

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iLike says the first song purchased today was Get Away, Jordan by Ernie Haase & Signature Sound. Music is available from all four major labels and “hundreds of indie labels, enabled via MediaNet.”

Rumors of the music store were first reported by CNET’s Greg Sandoval last month. Until now iLike has offered downloads from Amazon and iTunes. Those options remain.

The service is rolling out now on iLike (I was able to purchase a song), and should be available to all U.S. users by end of day, says iLike. iLike applications on iGoogle, Facebook, Bebo and other platforms will also be available “soon” says the company for U.S. users.

In an email exchange, iLike CEO Ali Partovi said:

We’re enabling the millions of music fans who discover and share music on iLike to purchase songs in-page directly from iLike. Our solution provides a smooth, immediate in-page purchase experience. You can sign up, enter your credit card, and download the music you just bought — all without ever leaving the web page you were on when you discovered the song.

We’re making it easier and more immediate for music fans to buy MP3s as an online on-Web activity. iTunes already provides a great music buying experience inside a media player, and we’ll continue offering our users the option to jump off iLike to purchase from iTunes. At the same time, we’re filling a void by providing a faster way to make impulse music purchases on the web. Our social features and integration into all the major social networks will create a unique music discovery and purchasing experience for music fans across the Web.

The iLike in-page download solution was achieved via direct deals with major labels and a relationship with MediaNet to support the back end fulfillment and provide indie label catalogs. PayPal is providing billing support.

Going forward we’ll continue to enhance our download service, which is currently in Beta, as well as making it available on other leading third party websites where iLike is embedded. Our goal over time is to offer music fans the ability to impulse buy in-page from wherever they are.

In other recent news about iLike, the company is rumored to be raising new capital in an unusual transaction designed to push out Ticketmaster, an investor since 2006.

Images from the purchase flow are below:

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Using the app is pretty straightforward: it allows you to view all venues in your area, with concert listings for events that are going on in the near future or further down the line. But it also includes a number of nifty features that the iPhone didn’t previously support. One of these is automated personalization — the application can look at your iPhone or iPod Touch’s library, and determine which artists you should probably be following (though you’re free to adjust the list on your own). Once you’ve found a concert you’d like to attend, the app includes links to sites where you can purchase tickets. Whenever you’ve got an alert, you’ll see a message pop up on your iPhone (much like an SMS message would) regardless of if you have the application open.

Now, iLike has previously offered a more basic application on the iPhone but it was much more basic — if you forgot to check the application manually, you wouldn’t know that your band was coming to town or their tickets were about to go on sale. And the old app didn’t have the automatic artist detection, either.

The one thing I wish the app did have was an option to not only determine which artists you’d like to follow based on their appearance in your music library, but also to take into account the number of times you actually listen to those artists. Obviously this would make things a bit more complicated, but there are plenty of artists I have on my iPhone simply because I feel obligated to fill the device’s storage space to the brim. In any case, iLike’s current suggestion system will be plenty helpful for most people. You can see it in action in the video embed below.

Alongside today’s launch, iLike is also releasing some of the initial stats for its custom iPhone app platform, which it launched in May. Over 250 artists have now used the platform to build their own applications, including Reba McEntire, Ingrid Michaelson, and Rusted Root. The applications allow artists to build rich iPhone apps — including music, video, concert listings, and Twitter feeds — with a minimum of effort It also taps into iLike’s syndication platform, which means content can be delivered to iLike’s 50 million fans easily.

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The company has raised a total of $16.5 million from the founders, Scott Banister, Bob Pittman, Vinod Khosla and Ticketmaster to date. But their last round of funding was in 2006, where Ticketmaster put the bulk of the capital in via a third round of financing that valued the company at a whopping $53.2 million.

In Q4 2008 Ticketmaster wrote down a number of their venture investments, including a $5.8 million charge for iLike. Internally, they valued that $13.3 million investment at just $7.5 million.

Now, we’ve confirmed, the founding team plus a new investor is offering to buy out all or some of Ticketmaster’s stake in the company. Founders Ali Partovi, Hadi Partovi and Nat Brown, all with significant personal fortunes, will invest part of the new round, with the new investor taking the rest.

The company isn’t commenting on this story.

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iLike, the popular music discovery site with a huge presence on social networks, is launching a set of new syndication services for musicians. Beginning tonight, iLike now offers extensive integration with Twitter, Facebook, MySpace, and YouTube, allowing artists to distribute content to each of their online presences from a single control panel. In addition to these, the company is also launching a new self-serve platform for building customized iPhone applications for artists, allowing them to establish themselves on the App Store with a minimum amount of effort and resources.

While most readers probably associate iLike with music playlists and streaming, the service is also home to 300,000 artists who use its services to help manage and distrbute their content. Before today’s annoucement, the service offered more limited syndication options, allowing them send data through the iLike Facebook application, its iGoogle widget, and an iTunes plugin. But the new options go much further.

One of the most significant changes is the release of a new ‘Music’ tab for an artist’s Facebook pages, which will allow them to incorporate their music, videos, and concert information (previously artists would have to rely on the iLike Facebook application). The service has also expanded its support for Twitter, allowing artists to import their Tweets from elsewhere and distribute them to their social network profiles, or to syndicate them directly from the iLike dashboard.

Other additions abound: artists can now sync their videos between YouTube and iLike, so they won’t have to post them in multiple places. They can create their own ‘dot-com’ websites, which they can manage from the iLike dashboard. They can syndicate their content directly to their Ticketmaster profile pages. And iLike’s concert app and event pages on MySpace have also gotten a boost, allowing fans to purchase tickets directly without having to go elsewhere and including more social features (like being able to see who else is going to a certain concert).

Finally, in what is easily the biggest departure for the company, iLike is also rolling out a platform that will allow artists to create their own iPhone applications, which can include dynamically updated photos, music, blog posts, and other content (you can see a demo of the app below). iLike is charging artists a one-time fee of $99, and will also participate in a rev-share deal for those that want to charge for their applications (the current plan is for a 50/50 split). Artists that give their application away for free will only have to pay the initial fee. The iPhone is quickly becoming a very popular and powerful way to connect with fans, and there’s no doubt even smaller bands are eager to appear in the App Store. But iLike won’t be alone in trying to tackle this market – other companies like Mobile Roadie and Kyte are offering similar platforms for building custom iPhone apps.

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Today, iLike released a social playlist app that lets you create a music playlsit and embed it on any Website. Then through Friend Connect, anyone can sign in and change or add to the playlist. I’ve embedded one below seeded with five songs that I’ve called TechCrunch House Party. Go ahead and add to it, but only good songs, please. Or create your own. Update: Oops, I created a regular playlist that can’t be edited by others by mistake. Turns out your site needs to be set up with Google Friend Connect for the social playlist to work. I guess you can suggest songs for me to add in comments.

Friend Connect is Google/OpenSocial’s answer to data portability. Just last December, it opened to all Websites. That means that anyone with a Google, Yahoo, AIM, or OpenID username and password can sign in.

iLike, for its part, offers full song streaming through a partnership with Rhapsody (which limits non-subscribers to 25 free tracks per month). The Rhapsody-imposed limit could eventually become a barrier to consumer adoption. The other problem with the app is that it is missing is the ability to vote up or down songs. There is no mechanism to ensure the playlist gets better as more people touch it rather than get worse. If iLike added that, it could start generating some amazing crowd-DJed playlists. As it stands, I fear most of these playlists will not get better the more people interact with them, which is how the value of all social apps should be measured.

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Through most of 2008 Facebook said on and off record that they had no real interest in their own music service and that third parties like iLike could continue to build their Facebook music applications without fear of competition directly from Facebook.

News leaked in the Fall, though, that Facebook had approached a number of third parties to power the official Facebook music application:

We believe, based on discussions with a number of sources, that Buzznet, iLike, iMeem, LaLa, Last.fm, Rhapsody and other services were contacted and provided with a document (sometimes referred to by sources as a RFP (request for proposal), other times called a term sheet) that outlined certain goals of the new Facebook music service.

The RFP requires the third party service to build and power a new Facebook Music Service that offers free music streaming and playlists, music downloads for a fee, and other music merchandising services such as ringtones, concert ticket sales and physical goods like tshirts (if this sounds like MySpace Music, it’s because it is exactly their model). The service must not only handle front end user requirements but must also be able to handle the very tricky tracking issues required by the labels to monitor music streams and fees.

The RFP also includes onerous termination provisions that allow Facebook to take ownership and control of the service and the user data under certain circumstances. In return, say our sources, Facebook will offer the third party a split on revenues generated from the service.

We’ve heard conflicting accounts of who will pay for the big up front fees labels require to get a music service up and running. Some estimates of prepaid royalty requirements are as high as $100 million, which Facebook is looking to avoid paying themselves. Other sources say that Facebook may be willing to pay these fees if they can’t force the third party to take them on.

Many people, us included, saw this as a new effort by Facebook to tackle the music opportunity. But our sources say it was actually near the end of a year-long effort by Facebook to launch their own free streaming music service in partnership with Total Music. Only when those discussion faltered did Facebook reach out to other third parties.

Total Music And Facebook

Total Music, a joint venture by Universal and Sony BMG, has had Facebook target from the beginning. The labels approach the Internet from two directions. The first is the command and conquer approach, which is how imeem, MySpace and others were neutered. Sue the hell out of whoever dares to host music online, then cut a deal with them that brings in millions of dollars in penalties and fees.

The second approach is what Total Music is all about. The service, which acquired Ruckus to handle the back end, is striving to cut two types of deals. The first is with device makers to allow music to be accessed directly from the device for free. The device makers pay a fee to Total Music, which is passed on to the consumer. The second type of deal is with websites – who get to stream music for free with advertising. The revenue from those ads, plus a lot of user data, is owned by Total Music.

That’s the deal that Total Music approached Facebook with. Facebook would get free streaming music (while rival MySpace paid a fee per song played). Total Music would serve advertising and keep all the revenue. Facebook would also hand over user data to allow Total Music to port playlists to supported devices and other services.

The deal never happened and looks like it never will. Some sources say it was because Facebook didn’t want to hand over all the revenue and user data, and so they reached out to third parties to get a better deal. But others have a different explanation which makes more sense. Warner Music refused to allow their music to be accessed for free.

Warner, a big shareholder in LaLa (a service we’ve raved about) – they took most of the company’s recent $20 million venture round. They’ve been pushing LaLa heavily to Facebook.

But LaLa’s model requires users to pay to stream music, a non-starter for Facebook and any serious rival to MySpace.

That leaves Facebook in a tough spot. Venture dollars to fund a big new streaming music service have dried up, so its unlikely that any third party will be able to pay the tens of millions of dollars it will require to get a MySpace Music-like deal done. The Total Music deal is being blocked by Warner. And LaLa’s business model just doesn’t work with what Facebook wants to do (free).

That means Facebook either needs to pay, or Warner needs to budge. Neither may happen, and rumor is that Total Music’s political capital at Universal and Sony has all but dried up as they struggle to complete the Facebook or any other deal.

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MOG has a history of doing cool new things around music. The service today includes a media player plugin that records and analyzes your music habits, a website that has a dedicated page for every artist, album and song with user generated reviews and posts, and an advertising network that provides revenue for 300 top music blogs. Users can also stream music via an excellent front end to Rhapsody.

All of that brings about 5 million unique visitors a month to their network, and the company says they should bring in about $5 million in revenue in 2009.

Now they’ve created a new music streaming product that breaks away from Rhapsody and its limitations. Like competitor ilike, which also uses Rhapsody, users can only stream 25 songs per month for free. That doesn’t compete well with free streaming services like MySpace Music, iMeem, Last.fm and others.

The new service, dubbed Mog 3.0 internally, is a fully free music streaming service that lets users play whatever songs they like on demand. The user interface is as good or better than LaLa, a service that we love despite the fact that streaming isn’t completely free. Founder David Hyman and VP Product T Jay Fowler gave me a demo of Mog 3.0 earlier today.

The service combines the ease of use of LaLa with free, which is enough to get our attention. But it also has a recommendation service that rivals Pandora when it comes to discovering new music.

The interface is genius. Users search or browse songs, artists or albums and then start listening to the music. More songs from that artist are suggested and added to the results as you play the songs. And if you move the slider to the right (see image to right), related music is added as well. That lets the user decide if they want a playlist-driven on demand music experience, or to change things up and add Pandora-style related music to the mix.

It doesn’t stop there. Users can also create playlists with the best tool on the market – it’s easier to create and share playlists than even Project Playlist offers, and users can associate a name, description and image with each playlist as well.

MOG plans to make other changes to the service as well, including adding streaming music to content pages, and creating user profiles that highlight the music you listen to and like. It brings in the best social aspects of Last.fm.

The product is compelling.

But it will quite possibly never launch.

MOG has label deals with Sony BMG and Universal locked up. They’ll provide streaming music rights for free in exchange for a revenue share. But Warner and EMI remain on the sidelines, and MOG says they won’t launch unless and untill they have all four major labels under agreement.

I, for one, really hope to see MOG 3.0 launch sometime soon. And if the last two labels don’t jump on board, MySpace should strongly consider buying MOG. MySpace has label deals locked up but their product continues to have unacceptable technical glitches. The music player is very slow to load and songs have an annoying tendency to skip during playback. Perhaps the MOG team can put that right for them.

More screen shots below – top image is the playlist tool, below that is a user profile page.

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Indie music download subscription service eMusic is getting an overhaul. Individual artist an dalbum pages already have more of an AJaxy feel and incorporate YouTube videos and Flickr photos. On Friday, its homepage switched over to a new design centered around a new recommendation engine powered by MediaUnbound. Now, when you sign in as a member, you are presented with a grid of “Music You’ll Love” made up of personalized recommendations. You can also sort by “New Arrivals,” which tries to give you new music that you will like, as well as standard “Best Sellers” and “New and Noteworthy” albums selected by eMusic’s editorial staff.

Helping members find new music they will love is the key to eMusic’s business, and it needs to do a better job. eMusic has 400,000 paying subscribers who have downloaded 250 million songs since 2003. Members can download anywhere from 30 to 75 tracks a month before they have to start paying on a per track basis. Once people stop finding new music they want, they are more likely to cancel their subscriptions. Better recommendations would reduce that churn.

eMusic wants to be your hipster friend who tells you about the latest, greatest bands before you hear about them anywhere else. “How do we act like that hipster friend or that corner record store?” asks senior vice president Jack Welde. He argues that the new recommendation engine will help them do that.

Music recommendations are a hard nut to crack, especially from a cold start when the music service doesn’t know anything about your tastes. The site’s old recommendation engine provider, ChoiceStream, just wasn’t cutting it. The MediaUnbound recommendation engine combines both algorithmic and human inputs to try to come up with better recommendations right from the get-go. It also is supposed to get better over time, of course.

On the algorithmic side, the recommendation engine looks at every action you take on eMusic, including searches, listening to 30-second previews, saving albums for later, and actually downloading albums. A download is weighted more than a preview. It builds a model for each member that takes into account genre preference, popularity interest, newness interest, experimentalism and expertise. MediaUnbound also takes into consideration global music preference patterns across P2P networks, Web radio, blogs, and other MediaUnbound music customers.

On the human side, MediaUnbound has more than 40 music analysts that actively tweak the recommendation engine, and add in new music recommendations. They act like the independent record store clerks of yore. In fact, some of them used to be record store clerks, as well as DJs and musicians.

How are MediaUnbound’s music analysts different from the ones who classify music at Pandora? MediaUnbound CEO Michael Papish answers me via e-mail:

Pandora has created a feature factory of humans chained to headphones attempting to objectively rate the sonic features of every song ever made (well, ok, only ~200k hand-picked songs). We think this is a horrible use of use of the creative, constructive, opinionated, and (sometimes argumentative) resource called the human music geek.

In fact, he had the following critique for all the competing music recommendation technologies out there from iTunes to iLike:

—Pandora. Purely sonic-based as determined by team of human experts classifying every song into features. Not scalable. One-trick pony only able to determine that one song sounds like another song, not anything about user preference or other personalized recommendations.

—iLike. Purely algorithm-based utilizing only data from other iLike members. Service is meant to be embedded in a widget, not a full-fledged recommendation platform across an entire music service.

—Last.fm. Purely algorithm-based utilizing only data from other members and their scrobbles.

—AmazonMP3. Utilizes the Amazon recommendation platform which is based mainly on collaborative filtering. We assume they use some human tweaking, but they’ve never publicly stated this fact. The AmazonMP3 recommendations are crippled because they are based on regular Amazon recommendations which are very focused on closely related items (i.e. Bob Dylan’s _Blood on the Tracks_ returns Bob Dylan’s _Blonde on Blonde_. duh!)

—iTunes Genius. Sub-standard, algorithm only – developed in-house. Only uses iTunes data. Steve Jobs has creepy man crush on John Mayer and Jack Johnson.

—MySpace Music. Crazy flashing yellow buttons that randomly start playing Buffalo Springfield songs when you visit your friend’s page.

His critiques are more or less valid, but I’m not convinced he’s come up with anything better. With very limited testing, I found the recommendations to be hit or miss. I will reserve judgment until I play with it some more. If it is an improvement from before, then at least that’s progress.

But my big beef with eMusic is twofold: it offers an incomplete catalog (no majors) and you can only listen to a 30-second preview (unless you there is a YouTube music video available, which is embedded on artist pages—go figure). So I find myself toggling back and forth between sites with full streaming and eMusic to figure out whether I wanted to actually download an album. In an era when limitless ad0-supported streaming is now the norm, eMusic will remain a niche music provider. But if it can somehow figure out how to surface new music that no other service can, it will remain a valuable resource for hard-core music enthusiasts.

What is your favorite music recommendation engine and why?

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Basically, TuneCore is the place to go if you are unsigned but want people to have access to your music – a sort of CDBaby for the digital world. After a small setup fee, the artist keeps all proceeds from the sale.

This model has also attracted established artists who’ve ended their label deals to the platform, too. Jay-Z, Keith Richards, Public Enemy, Nine Inch Nails, Ricky Skaggs, Paul Westerberg, MGM Studios, Warren G, Bjork, Moby, High School Musical cast members, Ali Lohan, Cirque Du Soleil, Starbucks, Joan Jett, Rockstar Games, David Byrne, MGMT and others use TuneCore today.

The company took $7 million in a venture round from Opus Capital, they are announcing today. Gill Cogan from Opus and Marty Albertson, the CEO of Guitar Center, join TuneCore CEO Jeff Price on the board of directors.

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Popular music service iLike has teamed with TuneCore, a music distribution platform, to help artists promote and sell their music as easily as possible.

TuneCore (whose CEO thankfully seems to have stopped handling the site’s PR) actually has an intriguing business model. For a flat fee, TuneCore will help artists distribute their digital music to a collection of music stores that the company has forged deals with including Rhapsody, Amazon MP3, and iTunes. Prices vary depending on how many stores you wish to reach and if you’d like to sell a single song or an entire album, but they are very affordable and bands keep 100% of revenue (you can see the pricing guide here).

While TuneCore isn’t introducing many new features with the iLike tie-in (it has offered the service independently for some time), its increased exposure makes sense for both sites. iLike has geared itself as a platform for artists to promote themselves on Rhapsody as well as a variety of social networks like Facebook and hi5. Giving artists an easy way to sell their music is the next logical step.

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