Media conglomerate CBS has bought Last.fm, the London-based social music network, for $280m.
Despite falling well short of the daft $450m buy-out which rumours linked CBS rival Viacom with recently, the deal cuts a new high water mark 2.0 for UK internet companies. The move underscores how big media companies are subsuming the most successful user-driven web ideas, leaving the me too 2.0 flotsam with long tail hot air and no access to advertising bounty.
Last.fm provides personalised internet radio and music video based on what similar users like. It has also rapidly become a top source for music event information. For its cash, CBS gets about 15 million active users worldwide. The firm pointed to Last.fm's success in building a young online community as a key attraction.
Last.fm, which was bankrolled by UK venture capital, gets the huge advertiser reach and possibility of profit that only a big network can provide, along with the financial clout it needs in the meantime to finish cutting deals with labels to allow it to webcast all recorded music. CBS is also the largest radio owner in the US, where Last.fm trails comparable personalised radio service Pandora.
As well as hundreds of independents, Last.fm, has so far signed up two of the four major labels, and prior to today's news was upbeat about the remaining pair of Sony BMG and Universal.
Under the terms of the acquisition, Last.fm's founders will continue to run the firm independently. Taking the service to mobile devices will be near the top of their to-do list: Pandora recently announced a raft of developments to free its stations from PC-based listening. ®
CBS was the long-time owner of Columbia Records until it sold up in 1988. The label's now part of Sony BMG, a leading light in the Recording Industry Ass. of America, which in turn has led a crusade to bully internet radio stations into paying grossly inflated royalties. Funny how things come around...