MySpace About To Pick Up Imeem?

MySpace may follow its acquisition of iLike with streaming music service Imeem to its music roster. TechCrunch, citing multiple unidentified sources, reports that the companies are in late-stage negotiations, price unknown. Whatever it is, it wouldn’t be the exit Imeem Cofounder and CEO Dalton Caldwell and investors hoped for when it relaunched as a social music service in 2005 with an innovative approach to sharing music online, when it made licensing deals for ad-supported streaming with all the majors in 2007, or, in 2008, when it acquired Shawn Fanning’s Snocap and its technology for digital rights and content management. Update: Rafat adds: We have confirmed the deal talks, though no clear what stage they are in.
MySpace, which spent a year or so developing MySpace Music on its own, wants more music heft. Acquiring iLike made it part of the new Google (NSDQ: GOOG) Music Search and brought in new talent. Adding Imeem would bring more of that social element and an established user base; it had 15 million uniques in September, according to comScore (NSDQ: SCOR) (via TC). TC also repeats a recent report that MySpacer Music will have to go subscription to manage costs. I’ve been told MySpace doesn’t plan to end free ad-supported streaming although I wouldn’t be surprised to see a premium/subscription offering; last week in Monaco, News Corp (NYSE: NWS). Chief Digital Officer Jon Miller told Rafat he believes in the “freemium” model as a concept, also saying that costs of payments to the labels make a paid model worth considering.
Imeem hasn’t had an easy time of it, spending much of the last year looking for ways to survive after a sales effort in late 2008. Warner Music Group (NYSE: WMG) wrote off its $15 million investment in the company in May, as well as expectations that it would receive $4 million fro the free streaming service. That same month, Imeem said it raised $2.4 million of a $6.5 million new round. Then, in June, Warner helped Imeem restructure, taking a larger stake in the company in exchange for lower licensing fees. WMG is also a partner in MySpace Music and execs were vocal early on about concerns the venture wasn’t delivering results fast enough.