iLIke was purchased by MySpace this week for $20 million. Hearing this annoucement, i couldn’t help think that something was off. Something just doesn’t make sense.
Some facts: iLike has 50 million registered users. That’s a huge number. They are definitely one of the most popular applications on Facebook and one of the best applications anywhere for concerts. They have built some things that are quite hard to build such as:
- A mp3 download store (link)
- A music activity feed crawling millions of artists and millions of users
- A ticketing system integrated with Ticketmaster
- A self-serve advertising system
They have raised $16 million bucks and claim to be profitable. Both Facebook and Amazon were interested in the deal. If both of these are true why would they sell for $20 million? Selling for $20 means that the investors get their money back and then then $4 million gets spread around to shareholders. Basically nobody makes any money that they are happy about.
To compare, Facebook just bought FriendFeed for $20 million and they have 1 million monthly uniques. iLike has at least 3x that on the web and 50x total and they are growing.
Also, I can’t imagine why a dynamic, fast moving company would want to go work at MySpace instead of Facebook or Amazon.
- MySpace vs. Facebook. One is doing a fantastic job of innovating and developing new innovative software (FB). The other is bleeding users, bleeding cash (MySpace Music) and restructuring. iLike has also actively been courting Facebook for the past 3 years. They’ve thrown Facebook / iLike parties and done everything possible to try to get a FB acquisition. Going with MySpace is strange
- MySpace vs. Amazon. One (Amazon) is in iLike’s backyard in Seattle and the other is down in LA. One is making good inroads into providing a viable music store to iTunes. The other (MySpace) started as a primary space for music but is now controlled by the labels and is getting worse and worse as they try to cut costs.
Both of those don’t make sense so then you have to conclude that they are just doing this for the money. But if (a) they are profitable and (b) it’s only $20 million on $16m raised then that doesn’t make sense either.
My conclusion from all this non-sense:
- iLike was not profitable and were running out of money. They needed to either raise more money or sell.
- Fatigue. Working in the digital music industry and having success at it is exhausting. Your main content source (music) brings with it tons of headaches. The labels are working against you every step of the way
- Facebook had no interest in getting into the music business. I think they see content area as something for partners and although iLike probably asked them repeatedly, they backed away from the deal. There is no better content company that is more integrated into Facebook than iLike. If FB didn’t want them, they’re not going to get anyone.
- MySpace paid more than $20 million. They won’t disclose the terms but my guess is that there is some kicker in there that made the deal very attractive to the shareholders. Too bad we don’t know what it is.
At least one or more of these have to be true. What are your thoughts?
I just read a great article by Clive Thompson called “Head for Detail” about Gordon Bell‘s latest experieement. Please just read the first 2 paragraphs. It’s about Gordon and how he is recording everything he’s doing (video, audio, emails, web, everything). He’s been doing it for the past 14 years and is able to bring up almost eveyrthing. Clive writes about Bell, saying:
He[Bell] had a tiny bug-eyed camera around his neck, and a small audio recorder at his elbow. As we chatted about various topics–Australian jazz musicians, his futuristic cell phone, the Seattle area’s gorgeous weather–Bell’s gear quietly logged my every gesture and all my blathering small talk, snapping a picture every 60 seconds. Back at his office, his computer had carefully archived every document related to me: all the email I’d sent him, copies of my articles he’d read, pages he’d surfed on my blog.
This really resonated with me as i am already trying to record my life. I have photos up on Flickr, i have my ideas going to my blog, i have my mundane thoughts going to Twitter, my videos going to YouTube, and my friend interactions recorded on Facebook. I’m already on the web but just in the totality that Bell is. Storage is getting cheaper and cheaper it’s gone from $233,000 for a gigabyte in 1980 to less than $1 today. Soon there will be enough storage in your cell phone for your entire life to be stored. I do this because i want to remember. I want my memories to be accesible all the time and reading the article made me realize how inefficent i’ve been in capturing them.
I really like articles like this becaues they make you think about where the world is going and wonder how human interactions and functions will change. It touches on how humans will change when we no longer have to remember stuff. I already don’t remember phone numbers beceuase of your cell phone. What if you don’t have to remember people’s names and interactions and you free you mind to be more creative. Just imagine – that’s what i’m doing now….
I read this article by Tim O’Reilly called “Why I Love Twitter” and it has some good points. Specifically:
- “Following” instead of “Friending” – in my opinion, only true/proper social networks that are primarily about social interactions (like Facebook or MySpace) should use 2-way friending. The rest should allow for 1-way following.
- “Ambient intimacy” is about deepening people relationships via short messages and thoughts. Similar to how you get to know someone who’s desk is right next to yours because of offhand comments, you can do the same via twitter
- Cooperating with others – Twitter allows others, even competitors, to utiilze them. And it seems to only strengthen twitter.
- A true mobile app – for me this is the first mobile application that works better on mobile than the web. It has truly changed how i think about working on a mobile device
Twitter is an interesting beast because it’s still niche but gaining steam. People also love to bitch about how it doesn’t have a business model. This is true, it doesn’t but neither did email for a long time and now it’s one of the biggest driver of pageviews and engagement on the web.
I only played around with it a little bit, but here are my initial thoughts:
- they got all the music in there to have a big ad-supported music service. This is not easy to do and only MySpace, Imeem, and (sort of) last.fm have done this.
- The service is not at all social. You can’t see any friends activity – no suggestions, no nothing.
- It’s not integrated into the rest of the site. If you go to Band of Horses page it only has 2 songs from their latest album (Cease to Begin) but if you go to music.myspace.com you search and can listen to all of the tracks from that album. Why?
I’m sure it’ll get better but for now it’s just a repository of music to listen to. I’ve only played around with it a bit but that’s my initial reaction.
What do you think?