MySpace in talks to buy imeem

Nov 17, 2009 By RYAN NAKASHIMA , AP Business Writer
MySpace logo

(AP) -- Online social hub MySpace is in talks to acquire struggling free music streaming site imeem, two people familiar with the matter said Tuesday.

The people spoke on condition of anonymity because talks are confidential.

An announcement could be weeks away, and terms are still being negotiated, but MySpace is trying to revamp itself and its MySpace Music joint venture with the major recording companies.

An acquisition could bolster the unit of News Corp. by adding imeem's approximately 4.5 million users, its technology and its executives, including founder and CEO Dalton Caldwell.

MySpace recently bought music recommendation service iLike for $20 million and gave the founding Partovi brothers new executive roles.

San Francisco-based imeem launched its advertising-supported free music business in 2007, but the company is having trouble making ends meet. Users create profiles and can recommend music to others or find out what they're listening to, similar to users of MySpace Music.

As a unit of media giant News Corp., MySpace would be better able to support any losses at the company stemming from royalties owed to recording companies than it could on its own. It's unclear what price MySpace would pay for the service, but one person said it was unlikely to be as much as MySpace paid for iLike.

In May, Warner Music Group Corp. wrote off its entire $16 million investment in imeem and also forgave $4 million it was owed by imeem in exchange for a small, minority equity stake. The company is majority owned by private equity firm Morgenthaler Ventures.

The music industry continues to experience falling sales of CDs, while digital revenues have not yet made up the difference, in part because consumers tend to buy singles rather than full albums when they do pay for music.

The potential acquisition suggests the difficulty that companies have had making a business that relies almost entirely on advertising.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Japan court orders Facebook to reveal revenge porn IP addresses

add to favorites email to friend print save as pdf

Related Stories

MySpace Music videos to appear on Facebook

Oct 21, 2009

(AP) -- Social-networking site MySpace is using its joint venture with recording companies to launch a music video service that will pop into millions of profiles at rival Facebook as well.

MySpace scoops up popular Facebook app iLike

Aug 19, 2009

(AP) -- Social networking hub MySpace said Wednesday it is acquiring iLike, a popular music application on rival Facebook, in the first move by new management to expand after a series of drastic cuts and ...

MySpace co-founder DeWolfe to step down (Update)

Apr 22, 2009

(AP) -- MySpace co-founder Chris DeWolfe will step down soon as the social networking site's chief executive, amid the site's stalled user growth and the rapid rise of rival Facebook.

Sony becomes 2nd label on Vevo music video site

Jun 04, 2009

(AP) -- Recording company Sony Music Entertainment has joined Vevo, an online music video site due to launch this year with the backing of Universal Music Group and YouTube.

Recommended for you

Kickstarter suspends privacy router campaign

23 hours ago

Kickstarter has suspended an anonymizing router from its crowdfunding site. By Sunday, the page for "anonabox: A Tor hardware router" carried an extra word "(Suspended)" in parentheses with a banner below ...

User comments : 0