MySpace drafts iLike in Facebook fightback

 

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By Reuters

Posted on 20 Aug 2009 at 08:24

MySpace will buy music recommendation service iLike, as the social network tries to reinvent itself as an entertainment portal.

MySpace declined to disclose financial terms of the acquisition, though earlier reports peg the deal at worth around $20 million. The company has confirmed it will be looking to extend iLike's social-discovery technology beyond music to areas such as entertainment, video and games.

iLike has become one of Facebook's most popular applications, and recommends music based on your friends selections. The service serves as Facebook's default music application, and is integrated into Facebook's News Feed. Facebook has not confirmed whether this relationship will continue.

"We think that integration of iLike should help drive stickier traffic and ultimately improve monetization of MySpace user base," says JP Morgan analyst Imran Khan.

The acquisition comes as News Corp owner Rupert Murdoch attempts to reinvent MySpace as an entertainment portal, taking advantage of its base in areas like music and movies.

While it is still one of the most popular video and music sites, data from Nielsen shows time spent by users on MySpace fell by 31% between April 2008 and April 2009. In the same period, user time on Facebook grew 700%.