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 restore some of its lost luster on the Internet.
The $20 million agreement to purchase iLike confirmed rumors that had circulated this week and was the first play that new CEO Owen Van Natta has made to expand MySpace's Web footprint after a series of drastic cuts and writedowns.
ILike, which has 55 million users, will remain headquartered in Seattle, and its management team will stay intact, with brothers Ali and Hadi Partovi in the top two slots. They founded the service in 2006.
Van Natta, who replaced co-founder Chris DeWolfe as MySpace chief executive in April, told reporters on a conference call that iLike technology will help MySpace users share songs, videos and games away from their MySpace home pages.
For instance, iLike already has 10 million users on Facebook. It also attaches itself to Apple Inc.'s iTunes music store with song recommendations.
"We believe what iLike has created isn't limited to just music and should extend to all the areas important to MySpace users, such as entertainment. video, and games," he said.
Facebook, which ranked iLike among its top eight applications and the third most popular in its entertainment segment, said it did not expect the acquisition to affect its users.
Van Natta said the iLike technology would complement its MySpace Music joint venture, a free music streaming and discovery platform it launched with major recording companies in September. The two services, however, will not be integrated right away.
He noted that MySpace Music was "doing extremely well," with monthly visitors nearly tripled since launch to 12.1 million in June.
MySpace is recovering from a serious of painful cuts after laying off 700 workers recently and breaking the lease on office space it no longer needed in west Los Angeles.
Its parent company, News Corp., booked some $630 million in impairment and restructuring charges due to Fox Interactive Media, which houses MySpace, in the three months to June 30. News Corp. bought MySpace for $580 million in 2005.
Fox Interactive Media revenue, the majority of which comes from MySpace, also fell 15 percent from a year ago in the last quarter to $192 million, dragged down by a 22 percent decline in ad revenue.
