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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With the proposed $2.5 billion merger between TicketMaster and Live Nation looming large, many venue owners and promoters are up in arms, deeming the deal anti-competitive and monopolistic (they may be right – the deal is being examined for possible anti-trust violations). Now ShowClix, a TicketMaster competitor that launched in early 2007, is launching the Fair Ticketing Fund, setting aside up to $5 million to entice venues and promoters away from the pending Live Nation Entertainment goliath. Other ticket vendors are also beginning to offer similar deals, including TicketBiscuit, which launched a $10 million fund last week.

For those who aren’t familiar with the ticketing business, here’s a bit of a primer. TicketMaster has long been contracting venues into exclusive deals, promising some portion of the service fees (also known as convenience or venue fees) the site racks up as an incentive for them to sign on. TicketMaster has become notorious for gouging customers with these fees, and many fear that with the Live Nation deal they’ll only continue to rise higher.

Smaller ticket companies like ShowClix don’t typically charge service fees that are nearly as high as TicketMaster’s so they usually can’t promise the same returns to venues. That’s where the their new funds come in: each is promising venues that they’ll use the new funds to compensate for the income they stand to lose from leaving TicketMaster. In effect, they’re giving venues opposed to the new deal a chance to protest it without doing too much damage to their bank accounts.

However, while ShowClix and TicketBiscuit may be giving away money for now, this is hardly a charity – any venues looking to take advantage of the Fair Ticketing Fund will be signing on with ShowClix under an exclusive year-long deal (which is fairly common in the industry), and TicketBiscuit will also mandate an exclusive deal. Still, it’s nice to see these smaller entities take on TicketMaster – I’m getting tired of “convenience” fees that cost a third as much as the ticket itself.

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This could be good news for the music industry, which suffers from steadily declining record sales and stands to benefit from more ticket sales for live performances. Or just another last-ditch measure to save itself from an inevitable death and rebirth.

According to Paidcontent, Live Nation and Ticketmaster have entered into a definitive agreement to merge into an entity called Live Nation Entertainment.

From the release:

The companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $2.5 billion. Under the agreement, Ticketmaster shareholders will receive 1.384 shares of Live Nation common stock for each share of Ticketmaster they own, subject to certain adjustments defined within the agreement. Live Nation and Ticketmaster shareholders will each own approximately 50 percent of the combined company. The new company anticipates generating approximately $40 million of operating synergies through the combination of their ticketing, marketing, data centers and back-office functions.

Ticketmaster specializes in online ticketing whereas Live Nation focuses on concert promotions. They will still have to go through regularly review before the merger can be completed, and as Paidcontent points out, there will be those in the music industry that create stiff resistance to this consolidation of power (especially with Ticketmaster’s reputation for monopolizing ticket sales on its own).

Eliot Van Buskirk from Wired suggests that the merger “could lead to a dramatic change in how event tickets are sold: from the fixed price norm that often results in quick sellouts for popular shows to an auction-based model that legitimizes what scalpers have always done.” The rationale:

If Live Nation and Ticketmaster merge, the combined entity could bypass the primary ticketing system partially or completely, forcing fans to bid against each other for tickets in Ticketmaster’s TicketsNow secondary market rather than selling them at a fixed price in the primary ticket market, the way they have done in the past.

This is not the first time Live Nation and Ticketmaster will have worked together. According to Barry Diller, who’s Chairman of Ticketmaster, “It was less than two months ago that Ticketmaster ended its 10-year partnership with Live Nation.”

The Wall Street Journal first reported that the two companies were close to making a merger announcement early Monday morning.

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This has been a brutal month or so for tech layoffs. According to our Layoff Tracker, there have been 19,683 job eliminations at tech companies announced since mid-September, and we’re not even counting the 24,600 people at Hewlett-Packard who are being eliminated as a result of its merger with EDS.

But only five big companies make up more than 90 percent of the layoffs: Xerox (3,000), Dell (8,900), Yahoo (1,500), eBay (1,500), and German chipmaker Qimonda (3,000). The other 33 companies are mostly startups, and collectively account for 1,683 layoffs. Although three more companies (Sony Ericsson, Nvidia, and TicketMaster) account for an additional 1,110 job losses.

After stripping those out, you get closer to a pure number of layoffs at tech startups: 573

That is the equivalent of about 57 startups with ten people each. And those are just the ones that we or other news outlets have been able to confirm. Our list of tips is much longer than that and we are working through it to confirm as many as we can. For instance, Cake Financial has laid off 30 percent of its staff, or 6 people.

Another company with unreported layoffs earlier this week was Meraki, which I’ve confirmed let go 20 percent of its staff (10 people). That makes Meraki the third Sequoia-backed company to announce layoffs this week. (The other two were Mahalo and imeem). Sequoia urged all of its portfolio companies to make cut-backs earlier this month.

At least most of these startups are already done with their layoffs, unlike Yahoo which announced a 10 percent cut is coming but won’t say who exactly is losing their jobs for another few weeks. Layoffs are bad enough, but don’t prolong the misery.

This past week alone, tech companies have laid off 13,809 people:

Company–––––––––Layoffs

Xerox————3,000
Daptiv————–21
Haute Secure———3
Cake Financial——–6
Mercent————-6
Dell————-8,900
imeem————-20
Mahalo————-6
TicketMaster——300
Eons—————8
Veoh————–15
Yahoo———-1,500
Wikia—————3
Meraki————-10
Break.com———-11

Total———-13,809

If you know of any layoffs at a tech company, please submit a tip with the name of the company and number of layoffs. If it’s been covered, also send a link to the blog post or news article.

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London based Seatwave, like StubHub (acquired by eBay for $310 million) and TicketsNow (acquired by Ticketmaster for $265 million) resells tickets to major events. The company was founded in 2006 by Joe Cohen, formerly with Ticketmaster and Match.com.

According to PEHub, the European market hasn’t had a strong online reselling presence, particularly compared to the United States.

Scalping tickets (reselling tickets) is not the easiest market to be in, with the practice frowned upon by many, and often illegal as well. The resale of football (soccer) tickets is illegal in the United Kingdom unless the resale is authorized by the organizer of the match, such as an under an agreement Seatwave competitor Viagogo has.

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Many of the tickets that scalpers, er, brokers, sell on these secondary marketplaces are initially purchased from the Ticketmasters of the world. So the markup is a missed opportunity for Ticketmaster, whose own TicketExchange has shown lackluster performance.

The TicketsNow deal shows how hot the secondary event ticket market is becoming, and Ticketmaster’s entry will likely help legitimize the sector (see our previous coverage on some of the problems with the industry).

The WSJ, which broke the story, reports (subscription required):

Ticketmaster President and Chief Executive Sean Moriarty said the company plans to share revenue from its new division with clients that own venues or promote events, although he said details on how the money would be distributed aren’t final. He said the move highlights a shift in the way ticket resellers are perceived, both by the public and by concert-industry participants. Where resellers once were viewed as shady scalpers, now, thanks largely to the Internet, they are becoming more respectable.

“Clients who five years ago were not willing to allow a ticket to be resold now want a piece of it,” Mr. Moriarty said. The size of the secondary ticket market is hard to judge, but estimates range from $2.5 billion to $5 billion a year in the U.S.

That’s a nice growth market for a business that is about to be spun off as its own stock.

According to comScore, TicketsNow had 1.5 million unique visitors in December, about the same it did a year ago, while StubHub attracted 3.4 million and has been growing nicely under eBay’s wing (although it took a major hit in November).

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That puts the value of iLike at a whopping $53.2 million. The company launched less than two months ago, on October 25.

We love the iLike service, which provides an excellent iTunes plugin that constantly analyzes what music you listen to and recommends new stuff. But what I don’t want to see is a “buy tickets” button next to each artist, effectively turning iTunes into a billboard. It’s not clear that’s what the companies intend to do, though. All they are saying now is that the agreement will “enable iLike to extend its reach while enabling Ticketmaster to engage consumers with deeply-integrated music and event discovery services intended to drive ticket sales.”

Previous investors in iLike include Khosla Ventures and Bob Pittman.

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