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News Corp's MySpace is Buying iLike

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JustCallMeSassy   Thursday, 08/20/09 11:20:38 AM
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News Corp's MySpace is Buying iLike
Published: Wednesday, 19 Aug 2009 | 4:43 PM ET Text Size By: Julia Boorstin

As expected NewsCorp's [NWS 12.75 0.12 (+0.95%) ] MySpace announced today it's buying social music service iLike, the most popular music service on all social networks. Though the company won't disclose the terms of the deal, it's rumored to be for about $20 million. This is part of News Corp's strategy to focus its social network on entertainment and music, differentiating it from Facebook. iLike is MySpace's first acquisition since Owen Van Natta took the job of CEO, it's also the first time he's spoken directly to the press. On the conference call Van Natta said the company would like to apply iLike's social sharing approach to all online media, including other entertainment and games, which is why it will be acquired by MySpace proper, not its music joint-venture

Van Natta reassured users that iLike would be unaffected by the acquisition and that iLike's team will continue to operate autonomously. A big part of iLike's business is its relationship with Facebook, so what now? Will MySpace be both a competitor and a partner with Facebook? Will Facebook restrict the application because of that? Van Natta says he expects the social networks will be "thrilled" that MySpace is "making iLike an even richer environment."

MySpace Music, the biggest attempt yet to bring together social networking and music, has been the focus of much of Van Natta's work so far, and rumors have been swirling that the joint venture with music labels hasn't lived up to the company's expectations. iLike plays directly into that push to make MySpace the go-to destination for music. Will applying iLike's social approach to games and video successfully broaden MySpace's focus? Or should it be honing in solely on music? News Corp took a massive write-down last quarter, largely on the Fox Interactive unit, which includes MySpace. We'll see how this acquisition helps turn things around.

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