AllThingsD » iLike

Code.org Sets Out to Bridge the Computer Science Education Gap

Liz Gannes — Tue, 26 Feb 2013 14:00:59 +0000

Many a tech company will tell you that hiring qualified engineers is their biggest challenge.

But maybe the problem is that there aren’t enough qualified engineers, because there aren’t enough people studying computer science in the United States, because not enough schools teach it.

That’s the premise of Hadi Partovi’s nonprofit Code.org, for which he has enlisted the support of people like Mark Zuckerberg, Bill Gates, Drew Houston and Miami Heat player Chris Bosh, who studied computer science before getting paid to play basketball for a living.

Partovi was previously a long-term Microsoft exec as well as a VP at TellMe and a founder of music startup iLike. He has made savvy early investments in companies like Facebook, Dropbox and Opower.

So what exactly will Partovi do to improve the state of computer science education? That’s actually unclear. “We can’t solve this unless people realize it is a problem,” Partovi said last week.

The first step is a star-studded short film with endorsements from a range of role models about the value of computer programming. “There’s nothing I’ve worked on that’s been more easy to convince people of,” Partovi said.

Here’s a five-minute version:

After first getting the word out and posting resources for teachers, Partovi said, his next steps will be getting more deeply involved in computer science education.

And here is Partovi’s slate of stats to try to help people realize the extent of the problem he’s trying to solve:

41 out of 50 states don’t recognize computer science as counting toward math or science graduation credit. It’s just an elective.
9 out of 10 schools don’t even teach computer programming (more if you count middle school or elementary), and that number is declining.
Only 2 percent of students graduate with computer science degrees.
There are 1.4 million computing jobs in the U.S. over the next decade, and schools are on track for only 400,000 graduates. The difference is 1 million jobs, or $500 billion.

PaperKarma's Mobile App Tries to Eliminate Junk From Your Mailbox

Tricia Duryee — Thu, 09 Feb 2012 06:58:08 +0000

PaperKarma is a new app that helps you reduce the amount of unwanted coupons, catalogs and postcards that clog your mailbox.

Users download the app to their iOS, Android or Windows Phone device; register, and then start snapping photos of the unwanted mail.

Once a photo is taken, the user taps the “Unsubscribe Me” button, and then PaperKarma does the legwork.

Sean Mortazavi, the CEO and founder of PaperKarma, who also works full-time at Microsoft, has spent countless hours and weekends tracking down 10,000 of the biggest junk-mail offenders so that you don’t have to.

The only full-time employee PaperKarma has is Brendan Ribera, an engineer formerly from Urbanspoon and iLike. He is also co-founder. Currently, Mortazavi, who works on open-source projects in Microsoft’s Visual Studio division, is self-funding the project.

Mortazavi said more than 100 billion pieces of junk mail are sent every year in the U.S. alone, making it both time-consuming and a waste of natural resources.

The company already has a long list of companies in its database, but if users submit requests for something that isn’t on file, PaperKarma will use Amazon’s Mechanical Turk to track down the culprit. The Turk typically can track down people for hire at a reasonable price.

PaperKarma’s mobile apps, which are free, launched 10 days ago.

Mortazavi imagines being able to make money in the future by partnering with various businesses.

For instance, you may not want the flyer from Costco, but you may be willing to opt in for electronic coupons. PaperKarma could then charge the business for finding that customer, because it also would be saving them printing costs and mailing fees.

A couple of services like this already exist, but Mortazavi said it’s the first one to create a mobile solution.

Doxo and Earth Class Mail, two other Seattle companies, are addressing the problem in different ways.

Doxo encourages users to sign up for electronic communications with companies, which in turn saves those companies money. Earth Class Mail will accept all of your mail at its warehouses; if the mail is not junk, Earth Class Mail will open it, scan it, and send you an electronic version.

Facebook Acquires Mobile Advertising Company Out of Stealth Mode

Tricia Duryee — Tue, 25 Jan 2011 17:26:14 +0000

Facebook has acquired Rel8tion and the employees of the nine-month-old Seattle-based start-up, which has been working under the radar to develop a hyper-local mobile advertising service.

Facebook confirmed the acquisition in a statement: “We’re excited to confirm that we recently completed a talent acquisition of Rel8tion, a stealth-mode startup in Seattle. The engineering team will join our growing Seattle office, and we’re looking forward to having them on board.”

Rel8tion was started in part by Peter Wilson, who has dabbled in just about every major company that has set up shop in Seattle.

In addition to his responsibilities at Rel8tion, he was spending one day a week assisting Facebook with setting up its Seattle office. He will now be an engineering director.

Prior to that, Wilson was an engineering director at Google for four years, helping to ramp up Google’s Kirkland, Wash.-based engineering center. He also spent nine years at Microsoft, working on Microsoft Windows, XP, MSN and Visual Studio in a variety of roles.

There’s not much information about the company, but according to the little information available on its site, it was trying to create a system for synching up a person’s location and demographics with the most relevant ad inventory.

A Facebook spokesperson declined to comment on the role the Rel8tion employees would play at the company, or on the terms of the deal.

Another founder, Scott Hannan, was previously a consultant for Microsoft, and worked as VP of Business Development at Pelago–which operates the mobile social network Whrrl–and Nat Brown, who is listed as the company’s CTO. Brown was previously VP of Technology at Myspace in Seattle and CTO of iLike.

Despite Facebook having a gigantic mobile audience, it has yet to monetize that traffic through advertising. With its introduction of Facebook Places, which allows users to check-in at local establishments and find local deals, you can only expect more is coming.

While both Apple and Google have made big bets in mobile advertising with large acquisitions of Quattro Wireless and AdMob, respectively, this can’t really be put in the same category given its relative size.

Why Digital Music Is a Terrible Business That Google Should Embrace

Peter Kafka — Tue, 22 Jun 2010 13:00:38 +0000

Digital music is a lousy business. Almost everyone who tries it loses money, and even mighty Apple says its iTunes Store is basically a break-even proposition after 10 billion songs.

But if Google (GOOG) does it right, it makes perfect sense for the search giant to jump in anyway.

As CNET reported last week (The Wall Street Journal followed up yesterday), Google has been talking to the big music labels about launching its own music service and has floated a 2010 launch date. But music sources I’ve talked to say the company has no deals with labels yet and that it’s still unclear exactly what kind of service the company would like to launch.

My suggestion: Start simple. Copy the iTunes pay-per-song model.

That’s not a revolutionary idea, and it’s not a super-lucrative one either, because most people don’t like to buy more than a few songs: Apple (AAPL) sells about two billion songs a year, and if Google launches a competing service, I doubt it’s going to grow the market by much. And given that about two-thirds of every digital download dollar gets passed back to the music labels/artists/publishers/etc., that’s a fairly modest market to fight over.

But a download store is a proven concept. And that may be a better one than trying to get people to pay the $5 to $10 a month fee that services like Napster and Rhapsody have tried with very limited success and that new entrants like Rdio, MOG and Spotify (one day) want to try again. And it’s a much better idea than trying to figure out how to sell enough advertising to pay for free music services (RIP, Imeem; good luck, MySpace Music).

Meanwhile, a viable music store gives Google the following:

A value-add for Android and a wedge against one-time ally Apple
An owned-and-operated destination for all the music search traffic Google currently sends out to MySpace Music (via iLike) and Rhapsody, Pandora, etc.
And just maybe, a reason for consumers to finally sign up for a Google Checkout account, which has had little traction despite years of effort. If Google can get Google Checkout up and running and create the billing relationship with its users that Apple and Amazon (AMZN) already enjoy, then all sorts of other businesses, from YouTube movie rentals to Android app sales, become much more interesting.

So what about the notion of a cloud-based service, wherein Google hangs on to your tunes and streams them to you on demand? Cool. But not crucial.

Apple has expressed an interest in something similar, but from what I can tell, it isn’t close to launching anything like it. So perhaps the Google guys see this as their chance to leapfrog Steve Jobs and company.

But successfully copying them would a fine start, too.

Google Plans Music Service Tied to Search Engine

Scott Morrison — Tue, 22 Jun 2010 07:00:31 +0000

Google Inc. (GOOG) is preparing to roll out a music download service tied to its search engine later this year, followed by an online subscription service in 2011, according to people familiar with the Internet giant’s discussions with the music industry.

Google’s proposals are still vague, say these people, and it’s unclear whether it has struck any deals with record labels so far. But Google has been stepping up conversations about offering new music services tied to phones running its Android operating system along with the broader Web, said people who have been briefed on the talks. The launch of Google’s download music store is still months away, these people said.

The discussions come as Google has been pushing deeper into music. Last year, as a first step, the company began linking to partner websites like iLike and Pandora through its search engine, allowing people to stream songs with one click from its search page. Now, the company is looking to tie its own service to its search engine, too.

The discussions come as the Mountain View, Calif.-based search company has been ramping up on entertainment content. Google is also moving to add professional content on its YouTube video site, and is planning to roll out a digital bookstore this year.

Read the rest of this post on the original site

As BoomTown Said: Partovi Brothers Finally Leave MySpace (Here Are the Internal Memos)

Kara Swisher — Wed, 21 Apr 2010 00:22:40 +0000

Well-known tech entrepreneurs and twin brothers Ali and Hadi Partovi (pictured here, right to left) are leaving MySpace, in a high-profile departure for the struggling social networking company.

Internal memos were sent around to staff this afternoon about the executive change, said sources, which you can see below.

“Hey everybody, it’s been super tough staying quiet about this news at the request of our execs,” said Hadi Partovi, in an internal memo obtained by BoomTown. “I know some of you are very surprised about this, and I want to apologize for not having had the option to brief you personally in advance.”

Hadi was SVP of Technology at the News Corp. (NWS) unit, while Ali was SVP of Business Development. Hadi will leave MySpace entirely, while Ali will have a special adviser role, said the memo from MySpace Co-President Michael Jones.

In a blog post in March titled, “MySpace Musical Chairs: Will the Partovis Stay or Will They Go Now?,” I wrote:

“In all likelihood, said sources, the Partovis will remain at MySpace for the next several months, although they are likely to move eventually to more senior advisory or special-project roles there in order to pursue longtime outside investing and entrepreneurial interests.”

Now that has come to pass.

The fate of the well-known tech wunderkinds has been one of the more interesting guessing games of late at MySpace.

MySpace managers have been keenly interested in avoiding the appearance that the company is in the grip of a talent drain, especially related to such well-known innovators.

The Partovis arrived in the midst of turbulent change at MySpace last August, just after its original CEO and co-founder, Chris DeWolfe, was suddenly tossed out and replaced by CEO Owen Van Natta, as well as COO Jones and Chief Product Officer Jason Hirschhorn.

As part of its new strategy to become an entertainment hub, the Beverly Hills, Calif.-based MySpace bought the Partovis’ social music start-up, iLike, in a deal engineered by Van Natta.

After it closed, Hadi was mostly working in MySpace’s Seattle office, and Ali was mostly based in San Francisco.

(See this funny welcome video Ali Partovi did at the time.)

But Van Natta suddenly got the boot in January after clashing with News Corp. digital chief Jon Miller, as well as Hirschhorn and Jones, sending MySpace into yet another storm.

Hirschhorn and Jones were then named co-presidents.

While several sources said the Partovis are not unhappy with the pair or with the new MySpace mediacentric strategy, the brothers sold their company with the idea of working with Van Natta.

“That firing reset things,” said one source close to the situation in March.

Nonetheless, there was some progress with iLike, including integration of MySpace Music with Google (GOOG) and a MySpace Events offering.

In addition, the pair have wide-ranging interests outside the company, including an active investment portfolio in such start-ups as Facebook, Dropbox, Opower, BlueKai and Flixster.

They have already scored big with investments in Tellme, which was sold to Microsoft (MSFT); Zappos, which was acquired by Amazon (AMZN); and IronPort, now owned by Cisco (CSCO).

And though iLike was not the success they had hoped for, their entrepreneurial record is strong. Ali Partovi sold LinkExchange to Microsoft, and Hadi Partovi, who also worked at Microsoft, co-founded Tellme.

Now, it seems, the Partovis are moving on to the next challenge.

Here are the internal memos from Hadi Partovi to iLike staff and from MySpace’s Jones:

From: Hadi Partovi
Date: Tue, Apr 20, 2010 at 5:15 PM
Subject: Fwd: Organizational Update (re Ali + Hadi)
To: staff
Cc: Ali Partovi

Hey everybody, it’s been super tough staying quiet about this news at the request of our execs. I know some of you are very surprised about this, and I want to apologize for not having had the option to brief you personally in advance.

I also want to call out looking backwards that we’ve all done a heck of a lot in just the last 6 months to help improve the MySpace business and to integrate iLike technology. Just a short list is below.

- iLike integrated MySpace Music into Google search (iLike provided the team, technology, and Google deal)
- iLike team+technology helped implement MySpace Events, launched with multi-million-dollar sponsorship commitments
- all iLike.com traffic has been merged into MySpace’s overall Comscore metrics
- iLike’s products have been featured in a TV ad by Apple, and will be in an upcoming TV ad by another major tech company
- iLike’s promotional engine has been used multiple times in coordination with MSM to promote new albums or new artists
- MSM videos have been integrated into iLike.com and iLike on Facebook
- iLike’s artist-stats are integrated into the MySpace artist dashboard
- iLike.com drives search engine traffic to MySpace artist pages
- iLike team implemented the imeem traffic redirection and data backend of imeem playlist integration
- iLike team provided backend metadata + recommendation engine for MySpace music search and song-similarities

Most importantly, thanks to our work, MySpace is the #1 provider of music on Facebook, music on Google, and Concerts on iPhone. Regardless of any challenges that MySpace needs to overcome, that is a great legacy that I know we’re all proud of.

I’m personally very sad that I won’t be working with any of you–the amazing team we built at iLike is perhaps our greatest accomplishment.

I’ll send an email to the Seattle folks to organize a proper going-away celebration :)

hadi

From: Mike Jones
Date: Tue, Apr 20, 2010 at 4:52 PM
Subject: Organizational Update
To: XXX
Cc: Jason Hirschhorn

Hi everyone,

Effective on Friday, MySpace SVP of Technology Hadi Partovi is leaving to pursue other opportunities. In addition to continuing his work as an advisor and angel investor to various startups, he will be following his passion for education by working directly with technology focused non-profits. Hadi leaves as a valued friend to the company, and we wish him the best of luck in his future endeavors.

Ali Partovi will be stepping down as SVP of Business Development, but will continue working with MySpace as a strategic advisor working on special projects. He will also be taking time to invest in and advise startups.

Hadi and Ali were instrumental in integrating iLike’s best in class technology into the MySpace brand. Last week’s successful Events launch was a direct result of that collaboration. Other noteworthy product integrations include last year’s Google Music Search integration and the Local Concerts App, which is currently the most downloaded concerts app for the iPhone and was featured in one of Apple’s latest iPhone TV spots.

Please join us in thanking Ali and Hadi for their contributions to MySpace.

-Jason & Mike

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

MySpace Musical Chairs: Will the Partovis Stay or Will They Go Now?

Kara Swisher — Fri, 12 Mar 2010 07:11:06 +0000

While there have surely been a lot of departures of talent at MySpace over the last year, including two major shifts in top management, one of the more interesting guessing games of late concerning the social networking company has been over the fate of well-known tech wunderkinds Hadi and Ali Partovi.

According to many sources inside and outside the company, that’s just the discussion the pair of serial entrepreneurs has been having with its newest leaders, as well as with News Corp. (NWS) digital head Jon Miller.

(News Corp. owns MySpace, as well as Dow Jones, which owns this site.)

In all likelihood, said sources, the Partovis will remain at MySpace for the next several months, although they are likely to move eventually to more senior advisory or special-project roles there in order to pursue longtime outside investing and entrepreneurial interests.

“They’re definitely staying for now,” said one source. “But it’s the ‘how’ is what’s being worked out.”

There are many shifting scenarios as the sides hash it out, said sources, but MySpace execs are keenly interested in avoiding the appearance that the company is in the grip of a talent drain, especially with such high-profile innovators.

Still, in an interview with BoomTown at MySpace’s Beverly Hills, Calif., HQ earlier this week (you can see part of that chat in the video below), Co-President Jason Hirschhorn said that there are likely to be a lot more departures at the company, as well as arrivals.

“It’s normal in a situation like this,” said Hirschhorn, quite correctly, given the wringer MySpace has gone through over the last year.

The Partovis arrived in the midst of turbulent change at MySpace, after its original CEO and co-founder, Chris DeWolfe, was suddenly tossed out and replaced by CEO Owen Van Natta, as well as COO Michael Jones and Chief Product Officer Hirschhorn.

As part of its new strategy to become an entertainment hub, MySpace bought the Partovis’ struggling social music start-up, iLike, last summer in a deal engineered by Van Natta.

After it closed, Hadi (pictured left) became an SVP of technology, mostly working in MySpace’s Seattle office, and Ali (pictured right) became its SVP of business development, mostly based in San Francisco.

But Van Natta suddenly got the boot in January, after clashing with Miller, as well as Hirschhorn and Jones, sending MySpace into yet another storm.

Hirschhorn and Jones were then named co-presidents.

While several sources said the Partovis are not unhappy with the pair or with the new MySpace media-centric strategy, the brothers sold the company with the idea of working with Van Natta.

“That firing reset things,” said one source close to the situation.

In addition, the pair have wide-ranging interests outside the company, including an active investment portfolio in such start-ups as Facebook, Dropbox, Opower, BlueKai and Flixster.

They have also already scored big with investments in Tellme, which was sold to Microsoft (MSFT); Zappos, which was acquired by Amazon (AMZN); and IronPort, now owned by Cisco (CSCO).

That said, with talent-retention packages in place for both Partovis, and good will between them and the new leaders, the sides are trying to come up with a workable arrangement.

MySpace declined to comment, but The Clash sure will (as well as Jones and Hirschhorn, below):

[ See post to watch video ]

[T-shirt photo courtesy of Zazzle.com]

MySpace and News Corp. Eye Flixster (But for What?)

Kara Swisher — Tue, 15 Dec 2009 01:12:11 +0000

[UPDATED]

Now that the digital equivalent of a super-vac, MySpace CEO Owen Van Natta, has sucked up some decent music start-ups–Imeem and iLike–for a song, to bolster the social networking site’s efforts to expand into an entertainment portal, what’s next?

According to several sources, the News Corp. (NWS) unit has turned its omnivorous attentions to Flixster, the popular social networking site for movies.

Whether this is an acquisition or more of a larger partnership deal with News Corp. digital entertainment sites is unclear. Several sources said a purchase was a possibility, while others talked about a more complex deal that did not necessarily mean a purchase.

Sources said any such deal is not imminent, but that News Corp. itself has been conducting extensive due diligence on the San Francisco-based Flixster, part of a plan to combine it with Rotten Tomatoes, another News Corp.-owned site run by its IGN Entertainment division.

Rotten Tomatoes features mostly premium content, including professional reviews, trailer videos and news. It has community feature that is just in beta, so it would be a nice fit with Flixster.

A MySpace spokeswoman declined to comment at the moment.

In 2007, the start-up was close to being acquired by IAC/InteractiveCorp (IACI) for $100 million, several sources said. But the deal went south when CEO Barry Diller changed his mind at the last minute.

Founded in 2006 by CEO Joe Greenstein and CTO Saran Chari, Flixster has raised $7 million in funding from Lightspeed Venture Partners and Pinnacle Ventures, as well as garnering an angel investment from Silicon Valley entrepreneur and LinkedIn founder Reid Hoffman.

Flixster has attracted a huge audience–upward of 50 million–who trade all kinds of recommendations, ratings, news and even post user-generated movie reviews on its Web site and via widgets on social networking sites, mostly on Facebook.

While Amazon (AMZN) unit IMDb (Internet Movie Database) is still larger in terms of traffic, the more innovative Flixster has been growing much faster and is more social, which makes it attractive to MySpace, sources said.

More important is the mobile growth. Flixster is the No. 1 movie app on Apple’s (AAPL) iPhone and leads on other smartphones too.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

Lala's Fire Sale That Wasn't: What Apple Really Paid

Peter Kafka — Mon, 07 Dec 2009 18:49:35 +0000

On Friday, I reported that Apple was buying Lala at a fire-sale price, which meant that investors in the music service wouldn’t get their money back. I was wrong.

Apple ended up paying around $80 million for the company, according to multiple sources. That’s less than half what investors valued the company at in 2008, but it’s more than the $35 million the company raised throughout its life. Which means that some investors could get their money back and more.

But not all of Lala’s investors. Warner Music Group (WMG), for one, ended up getting back about half the $20 million it put into Lala, I’ve confirmed with people familiar the company.

That’s consistent with the $11 million write-down Warner took on its stake back in March. But it’s also confusing. Most venture deals include a clause that gives investors the right to get their money back–often with a premium–before anyone else gets paid following a sale. So any price of $35 million or more should have paid back the music label in full.

I’ve asked Warner for comment, but haven’t heard back. I’ve also reached out to co-investors Bain Capital Ventures and Ignition Capital. Apple (AAPL) spokesman Steve Dowling offered up his now-standard line on the deal: “Apple buys smaller technology companies from time to time, and we generally do not comment on our purpose or plans.”

Warner executives can at least say that they did better on Lala than they did with Imeem, a rival digital music service. Warner lost all of the $15 million it put into that one, which is being acquired by News Corp.’s (NWS) MySpace.

And the Warner guys can also tell themselves that employees from a company they once backed are now working at Apple, which can’t hurt.

Meanwhile, the Lala team, which should begin reporting to Apple today, gets credit for selling the company at any kind of premium at all. It’s not a home run, but it’s much better than it could have been.

The start-up has gone through multiple iterations, and its most recent was a streaming music service that sold access to songs for 10 cents apiece. But despite a recent promotional deal with Google (GOOG), the company appeared unlikely to succeed on its own.

Silicon Valley chatter is that founder Bill Nguyen, who spent six months in Hawaii this year trying to launch another start-up, and CEO Geoff Ralston had become weary of the same problems that have bedeviled other music start-ups. So they were looking to land Lala at a larger entity.

One thing that helped the company extract a decent price is that it had $10 million cash on hand, say sources who’ve seen the company’s books. That meant it didn’t have to sell immediately.

But Lala’s real asset was its technology team: In the end, Apple bought the company to get its hands on its engineers, who had built a slick streaming service as well as an iPhone app, which Apple has yet to approve.

If you’re feeling glass-half-empty, you can note that Lala’s $80 million price tag is a big comedown from the $200 million investors thought the company was worth a couple of years ago. But if you’re feeling more generous, you can conclude that any kind of return is worth noting.

The last big exit for a digital music company happened way back in the spring of 2007, when CBS (CBS) paid $280 million for Last.fm. But no one has gotten anything close to that for digital music since then. Imeem is being sold for spare parts, and News Corp. also bought iLike at a steep discount. Spiralfrog filed for Chapter 11 after burning through its cash.

But people are still trying. Pandora Media raised another $35 million this summer after a royalty deal helped breathe life into the Internet radio company.

Meanwhile, venture-backed MOG, whose investors also include some music labels, has just launched a streaming music service of its own. And Spotify, the European music service, has raised a pile of money and generated much more hype, though it has yet to land in the U.S.

Maybe one of them will get it right.

Confirmed: Apple Buys Music Service Lala, at a Fire Sale Price [UPDATE]

Peter Kafka — Fri, 04 Dec 2009 22:11:37 +0000

Note: Sources now tell me that Apple ended up paying much more than I had thought for LaLa — around $80 million. That means that some investors could indeed get a return on their investment, thought not all of them will. You can read a full update here, but I’m leaving the rest of this report as is for the time being.

Apple has purchased online music service Lala, I’ve confirmed with a source familiar with the transaction. Both Bloomberg and CNET reported the chats earlier today. If you’d like other confirmation, New York Times also reports that the deal has closed.

Lala’s investors will not get a return on the $35 million they’ve put into the company. Earlier this year, founder Bill Nguyen told me he was working on a deal to get the company more funding in an “up round”–that is, at a higher value than the previous round.

But Warner Music Group (WMG), which had previously invested $20 million in Lala, wrote down $11 million of that. And a source tells me that the Apple transaction reflected a similar discount, meaning that investors will be lucky to get 50 cents on the dollar on this one.

UPDATE: A second source close to the company insists my estimate is “way off” but won’t offer up other details.

What’s unclear is exactly what Apple has bought. Lala offers listeners a streaming music service with one free play and access to replays–not downloads–for 10 cents a track. But while the service recently got a boost via Google’s (GOOG) new music search offering, where it’s one of two featured partners, it doesn’t have a huge customer base to sell, which means Apple (AAPL) could be interested in acquiring its technology and/or team.

The deal is the third acquisition of an online music service in recent months. News Corp.’s (NWS) MySpace has already picked up iLike and Imeem at fire-sale prices.

I’ve put in requests for comment to both Apple and Lala.

Confirmed: MySpace Looking to Buy Imeem

Peter Kafka — Tue, 17 Nov 2009 14:07:39 +0000

Going, going, gone: The last of the Web 2.0 music services are dwindling away. The latest is Imeem, which is in the process of being purchased by MySpace, I’ve confirmed.

Haven’t heard a price yet, but I wouldn’t expect much, given that this deal, like the iLike purchase MySpace made earlier this year, is an “acqhire”–News Corp.’s (NWS) social network/portal wants to buy Imeem for its “sales team, engineering, Snocap and other Imeem IP,” a person familiar with the transaction tells me.

The deal, which isn’t finalized, was first reported by TechCrunch.

Once it’s finished, it will conclude an up-and-down year for Imeem, in which the service pleaded with the major music labels, successfully, to change the terms of its music licensing deals, which were killing the streaming music site. But that wasn’t enough to prevent investor Warner Music Group (WMG) from writing off the money it had sunk in the service (though Warner later ended up increasing its stake in the service without actually writing another check).

Like other Web music services that sprang up in the past few years, Imeem wanted to provide users with free tunes, and pay the licensing fees by selling advertising against its user base. But the economics for that proposition appear unworkable: The labels, who are afraid that giving away music on the Web will kill any chance they have of selling the stuff, are reluctant to cut their fees substantially, and ad dollars for music sites have been relatively hard to come by.

That dynamic is still causing problems for MySpace’s own music service, one of the few remaining sites offering free streams. It will be interesting to see how that company is affected by “OneBox,” the new Google (GOOG) search feature which provides free streams for searchers, then directs them to MySpace and LaLa, one of the other surviving services.

Exclusive: Microsoft's MSN Is in Early Talks With MySpace About Music Tie-Up

Kara Swisher — Tue, 27 Oct 2009 10:34:47 +0000

Microsoft’s MSN is in preliminary talks with MySpace about using the social networking site’s music service, MySpace Music, to help power music offerings on the giant portal.

While sources at both companies cautioned that the talks are still early, Microsoft (MSFT)–which has its own music site that it programs with original and partnered content–execs are interested in goosing it.

That’s because MSN Music consistently ranks substantially lower than other big online music properties in terms of traffic, while MySpace Music is always near the top.

Sources said Microsoft execs don’t think they can do as good a job as MySpace is doing and don’t see the point in striking needed but complex deals with music labels, which the News Corp. (NWS) property already has.

In an April report by comScore (SCOR), for example, MySpace Music was No. 2, just behind AOL Music, with 27.4 million unique monthly visitors. MSN Music was No. 6 with just 7.4 million.

Nonetheless, music is an area MSN cannot lag so badly in, given that entertainment is one of the key categories it is focusing on as it preps for a major renovation of the portal.

As BoomTown wrote in mid-July about a wide variety of changes coming to MSN:

MSN, Microsoft’s online portal, is also preparing a major redo of what U.S. and, possibly, international consumers will see, as it doubles down on five key content verticals, while cutting back on others.

In a new focus that will start to be apparent in the next month, MSN will heavily add to its News, Sports, Finance, Lifestyle and Entertainment offerings, weaving more data from [its search service] Bing into the mix.

“It’s a decision to make it so MSN does less better,” said one source close to the situation. “So there will be a focus of attention on a smaller number of categories in which we can be either #1 or #2 in, rather than #4 or #5.”

It is not clear exactly what the financial terms would be in any tie-up between MSN and MySpace, which could include licensing of content and other services related to music.

But such a deal is not unusual–MSN’s sports site is powered by Fox Sports, which is another News Corp. property.

And such a partnership would also key into concepts that MySpace CEO Owen Van Natta outlined in a recent interview onstage at the Web 2.0 conference.

Key among them was boosting music and entertainment overall and making them the prime focus in the site’s efforts at reinvigorating itself, as well as expanding distribution of MySpace.

In fact, MySpace recently bought social music service iLike to expand its distribution all over the Web, for example–including on Facebook, the longtime social networking rival from which MySpace is now trying mightily to differentiate itself.

In his appearance, Van Natta also unveiled a music video hub, the ability by users to buy music using Apple (AAPL) iTunes, and a set of better analytical tools–called MySpace Music Artist Dashboard–to help artists figure out how to best work with fans.

But MySpace needs more than these, and a link with Microsoft would provide it with a traffic gusher, since MSN’s main page remains one of the most trafficked sites on the Web.

If such a distribution partnership were struck, it would also raise the question of what will happen regarding MySpace’s negotiations with Google (GOOG) over renewal of their search deal, which expires next summer.

Dissatisfaction over the pricey three-year deal has been expressed by both sides; their mutual grumbling is one of the biggest open secrets in Silicon Valley.

Doing a search deal with Bing is the obvious and only alternative, although few expect any agreement to be as rich as the one MySpace did with Google in 2006 for $900 million.

Interestingly, it was recently reported that both Google and Facebook were bolstering music search and sales offerings, and Google’s apparently includes the use of the iLike player.

In other words: This could get really complicated.

Execs at both MySpace and Microsoft I reached out to declined to comment.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

Google Steps Gingerly Into Music With "One Box"

Peter Kafka — Wed, 21 Oct 2009 14:50:31 +0000

Google insists, over and over, that it has no intention of getting into the content business. So how is it finessing its way into the music business? Very carefully.

The search giant is working on a new service that will provide searchers with streaming music, which sounds a whole lot like a content play at first blush. But Google will only be offering limited bits of music, and it will be relying on other companies to actually provide the tunes.

Sources describe the service, which they refer to as “One Box,” as a refined set of answers for music queries. The idea: Punch in, say, “Madonna,” and you’ll be presented with one or more songs, which may be partial clips or full-length versions, then guided to other sites where you can purchase the music.

That is: If you’re looking for Google (GOOG) to launch a rival to Apple’s (AAPL) iTunes or to music streaming services like iMeem and MySpace Music, this isn’t it.

In fact, Google is actually partnering, in a way, with News Corp.’s (NWS) MySpace: iLike, the music start-up that MySpace purchased earlier this year, is one of the two services providing music to Google, industry sources tell me. The other is Lala.com, which has a novel streams-plus-cheap-songs concept. (This is presumably one of the “big announcements” Lala founder Bill Nyguen was referring to yesterday when I spoke to him).

UPDATE: Streaming music service imeem will also be providing songs for the new service, I’m told by people familiar with Google’s plans. It’s unclear to me whether the company will provide full streams in search results. No comment from Google, Lala, MySpace or Imeem. Or the labels, for that matter.

At this point I’m not clear how Google and the labels will determine how much of a song a searcher will be able to listen to. Last I time I checked, iLike didn’t have the ability to provide full song streams at all. And Lala’s licenses only allow the service to provide listeners with a full song once–after that, they have to purchase the track from the service.

One other note: “OneBox” is the name of an existing Google feature that offers up not just links, but actual answers to certain queries. (Think of weather, or stock results). So while it’s possible that Google intends to brand the service with that name, I wouldn’t be surprised if this was the term the company has been using internally and with the labels, and that the service will have a different name when it launches.

TechCrunch first reported about the service this morning.

It's Another Tequila Start-Up: Bob Pittman's New Venture

Kara Swisher — Fri, 16 Oct 2009 09:14:45 +0000

Earlier this week, while in New York, BoomTown paid a visit to well-known media and Web exec Bob Pittman to hear about his newest venture.

And, as it turned out, it tasted pretty good.

That’s because the former MTV wunderkind, AOL top exec and currently, investor in a wide range of media and Web companies, is making tequila instead of Internet sites.

Thank God it’s Friday!

That might be the liquor talking, since accurate reporting is a requirement at All Things Digital–but this was one of the more enjoyable interviews I have had with Pittman over many, many years.

After leaving the job of COO at then-troubled AOL Time Warner (TWX) in 2002, Pittman has been investing via the Pilot Group in Web start-ups like Thrillist, iLike, Zynga, Next New Networks, as well as radio and television properties.

Pilot sold DailyCandy to Comcast (CMCSA) in 2008 for a reported $125 million.

Tequila-making is yet another unusual tack for Pittman, who is now busy trying to turn “Casa Dragones”–which is made from the blue agave plant in Mexico–into the next big thing in the high-end liquor business.

Aiming directly at the top-shelf brands like Gran Patrón, Pittman is trying for a “sipping” tequila, in contrast to most versions, which typically deliver a sharp kick.

Using a series of tasting parties and marketing efforts to make the $275-a-bottle tequila a must-have at key bars and clubs, it will be interesting to see if Pittman can turn spirits into profits.

Here’s Pittman talking about his tequila adventure in a video interview (and, below it, Joe Nichols singing one of my favorite country songs, “Tequila Makes Her Clothes Fall Off”):

[ See post to watch video ]

Joe Nichols – Tequila Makes Her Clothes Fall Off

MySpace Poised to Hire New Ad Sales Head as It Preps Music- and Entertainment-Centric Strategy and Redesign

Kara Swisher — Wed, 07 Oct 2009 08:57:04 +0000

In a week, the entire advertising sales staff of MySpace will gather at a swanky new seaside resort about 20 miles south of Los Angeles to get a first glimpse of the fresh direction the company is preparing to take under its new management.

The beleaguered social networking site has been in the midst of an effort to reinvigorate its image, spur innovation in its product and–most of all–pull itself out of a too-long slump, even as longtime rival Facebook has seen explosive growth.

Now, with a new team of execs, the News Corp. (NWS) property is putting the finishing touches on a master plan, which will include a new redesign of its hopelessly messy interface and doubling down on a product strategy that will center on, said one source, “what we own”–namely, music and entertainment.

On the agenda, aptly enough, for the 150 ad sales employees, who will gather at Terranea in Palos Verdes, is Ben Sherwood, author of “The Survivors Club: The Secrets and Science That Could Save Your Life,” and founder of a Web site of the same name that describes itself as “the place for surviving and thriving.”

Also coming to the meeting will be several bands that have successfully leveraged MySpace as a platform, to talk about their experiences and to play for the crowd.

And, perhaps most importantly, the group might also get to meet its new boss by then, as several sources close to the situation said that MySpace has settled on an exec to fill the key job of running its ad business.

While it is unclear if the deal is completely done, sources said MySpace management will announce the pick this week.

Sources added that MySpace has been particularly interested in one exec from Viacom (VIA) and another from Microsoft (MSFT).

While the sources would not name the Viacom exec, several pointed to Keith Lorizio, Microsoft VP of U.S. sales, as someone MySpace has been targeting.

In late August, MySpace sales and marketing head Jeff Berman left the company as MySpace hired MediaLink, a New York- and Los Angeles-based media consultancy, to help get its ad sales business back on track.

That effort has been led by MediaLink President Wenda Millard, who is well known in the ad industry and was longtime leader of the ad sales force at Yahoo (YHOO).

Getting an experienced top ad exec in place will round out a recent spate of new hiring by MySpace, including a new CTO, Alex Maghen, who moved over from its MySpace Music joint venture, and a new CFO, Mark Rosenbaum.

This has been part of a wholesale flushing out of most of the top execs who worked under co-founder and former CEO Chris DeWolfe by new CEO Owen Van Natta.

Van Natta, along with COO Michael Jones and Chief Product Officer Jason Hirschhorn, have been squirreled away since late April, working at cleaning up the company by replacing management, restructuring its various units and cutting costs, including massive layoffs.

They have also been trying to come up with a plan to differentiate MySpace from Facebook, a good strategy since it is now well-nigh impossible for the Beverly Hills-based MySpace to catch up with the Palo Alto, Calif.-based Facebook’s galloping growth.

While the whole new offering will not be rolled out prominently until at least the first quarter of next year, said several sources, some changes will begin sooner, including a gradual redesign of the site.

Under the new plan, said several sources, the main idea will be to shift the focus to engagement over sheer audience numbers. While MySpace is still huge, with about 70 million monthly U.S. visitors, increasing how much time they spend on the site is the goal.

“It’s not like numbers are not important, but the better metric for MySpace will be how involved users are,” said one person close to the situation. “MySpace needs to win on minutes.”

And, rather than the wider and more scattershot approach of past years, the new direction being stressed is more scalable and focused.

“It is not about getting everyone and their mothers on MySpace,” said a source, “but about being a better site to those here.”

That will include stressing “ownership” of online categories, which for MySpace are music and entertainment, with the hope that advertisers will be attracted to more engaged users.

Unlike Facebook, which is often described as a utility platform for communications between friends, sources said MySpace will be aimed more at being a platform for communities of interest.

That includes using tools from other companies, such as MySpace’s recent two-way synch with Twitter, the hot microblogging service, to link those communities.

Presumably, the company’s August purchase of iLike, the social music start-up, is also part of that plan.

“Instead of the ability to just connect friend to friend in a single social graph, this will be about connecting a person to their communities of passion and interest and to others like them anywhere,” said one source.

Music is the obvious key leverage point, the still-bright spot of MySpace, followed by adding big entertainment categories like movies, television, gaming, video and other pop culture arenas.

(BoomTown request: Become the HQ for “Gossip Girl” addicts, um, fans, and I am so there.)

“MySpace should represent pop culture online to customers and advertisers,” said one source. “The core strength has always been music and that is where the site will really excel, because it binds customers to the service.”

The even heavier music focus on the main juggernaut site, noted several sources, does create an odd situation with MySpace Music, the separate joint venture the site has with music labels to create a massive music community.

While sources do not think News Corp. will attempt to suck MySpace Music back into the main site, due to the complex partnership issues, the idea is to make them even more deeply integrated and to sell them to advertisers as one powerful marketing message.

In any case, several sources noted that one of the most successful parts of the new plan has been to convince News Corp. leaders that MySpace does not have to beat Facebook to be successful.

Sooner than later, of course, MySpace has to do just that.

Will it work? Who knows, but said one source close to the situation quite correctly:

“There is no silver bullet for MySpace–it just has to climb back step by step.”

(Full disclosure: News Corp. also owns Dow Jones, which owns this site.)

Why Buy When You Can Hire? Time Warner Cable Gets a Joost Guy.

Peter Kafka — Fri, 04 Sep 2009 16:40:49 +0000

What happens to a start-up whose business never materializes? One option is to try to peddle the company based on the value of its human capital–aka the “acqhire.”

We’re seeing lots of that as the last bubble shakes out (see: MySpace and iLike, Facebook and FriendFeed). But that strategy also raises plenty of eyebrows from other buyers, who figure that they’re happy to let a struggling company fold, then pick up the talent piece by piece.

Did that just happen with Joost and Time Warner Cable (TWC)? Looks like it.

The cable provider has snapped up former Joost CTO Jason Gaedtke. The company tells Cable Digital News that Gaedtke will report to Mike Hayashi, the multiple system operator’s executive vice president of advanced engineering.

The assumption is that Gaedtke will be helping the company build out its own version of “TV Everywhere,” the Web-video-for-subscribers scheme that everyone from Comcast (CMCSA) to AT&T (T) is trying out.

Not an earth-shattering hire, but I’m noting it here because prior to Joost’s decision to all-but-pull-the-plug, the start-up was trying to peddle itself to buyers like…Time Warner Cable.

The theory: The Web video company hadn’t been able to generate much business, but it had a lot of smart people who could help, say, a cable company build out its own Web video strategy.

So, given that the Web video industry is in the midst of a long-awaited contraction, is Gaedtke’s hire the kind of thing that could undermine other potential deals? We’ll see.

BoomTown Will See You in September

Kara Swisher — Fri, 21 Aug 2009 16:00:28 +0000

Starting today and through next week, BoomTown is headed south down California’s lovely Highway 1 for as much of a vacation as I can possibly take.

Which is to say, just a week off from posting (if one does pop up, forgive me, but it was probably already baked).

In other words: iLike twins, Wenda, Owen, play nice! Yahoos, please hold onto your internal memos. And I hope Apple’s iTablet is not delivered from on high this week while I relax beachside (it won’t be).

This summer has been unusually news-laden for the digital sector–the Yahoo (YHOO) deal with Microsoft (MSFT); all the machinations at News Corp.’s (NWS) MySpace, Facebook and Time Warner (TWX) online unit AOL; various and sundry Google (GOOG) battles; some tasty Amazon (AMZN) follies; Palm (PALM) Pre-ambulations; and, of course, more Apple (AAPL) hijinks than you can count.

Oh yeah, and whatever Twitter fill-in-the-blank-you-like.

But I digress, and will now return to my annual scheduled programming–a blog-free week with some really interactive time with the kids and family in Santa Monica.

This week is a particularly good time to take time–a big birthday celebration for my Twitter-bashing mother and also a 10th wedding anniversary (an inexplicable event, except to say–given it is me we’re talking about–that I obviously married a saint).

For all that and more, see you in September. (Actually, August 31, but who’s counting?)

And, until then, here is a cool video of someone playing a 45 of that great song by the Happenings on an old turntable:

MySpace to Hire Media Link (and Millard) to Fix Ad Sales; Berman Out

Kara Swisher — Thu, 20 Aug 2009 18:26:35 +0000

UPDATE: In an internal memo, MySpace is now telling employees that current ad sales head Jeff Berman is leaving the company.

In a move that will surely have Madison Avenue talking, well-known online advertising sales executive Wenda Harris Millard (pictured here)–who is now president of New York- and Los Angeles-based media consultancy Media Link–is poised to take over all advertising sales at MySpace, sources said.

But, in an unusual twist, she will remain in her job at Media Link, which has also been hired by MySpace to advise on restructuring the social networking company’s salesforce.

Sources said the arrangement is expected to be announced sometime today.

While details are still being hashed out, Millard–who was the top ad exec at Yahoo (YHOO) in its glory days and who recently left her job as co-CEO of Martha Stewart Living Omnimedia (MSO)–will apparently report to MySpace CEO Owen Van Natta directly.

In turn, all regional advertising vice presidents at MySpace will report to her. Millard is likely to work out of New York, where she lives and where the Beverly Hills, Calif.-based MySpace also has offices.

(You can see a video interview that BoomTown did with Millard a year ago below, when she was still at MSLO.)

This is a big coup for Media Link, which was founded by Michael Kassan, given that it will essentially be running a major part of the business of MySpace as MySpace seeks to reinvigorate itself, spur innovation and reset its product strategy.

Media Link hired Millard in April, which turned out to be a good move as she appeared to be the obvious draw for MySpace, as well as News Corp. (NWS) execs.

She is well known to them, as well as to many in both the Internet and advertising industries. Millard has been a longtime online exec, working at Ziff Davis Media and DoubleClick in the very early days of the Web. She was also chairman of the Interactive Advertising Bureau last year until this past April.

MySpace also reportedly talked to several big online advertising sales execs like Millard about the job, according to several sources outside the company.

This development now leaves the fate of President of Sales and Marketing Jeff Berman (pictured here) unclear.

But several sources told me Berman–whom I wrote earlier this summer was “rumored to be on the bubble,” but remaining for the time being–has been actively looking for a new job in the past few weeks and even told at least one person he spoke to that he was going to be “gone from MySpace by Labor Day.”

Probably sooner, now that MySpace is about to hire Millard and her firm to take over a big part of his job.

Yesterday, MySpace made another splashy move by buying the social music site, iLike, the first acquisition by its new exec team, as part of a move to push the “socialization of content.”

In a statement in the press release about the iLike acquisition, Van Natta might be seen as tipping his hand a little bit: “We are deeply committed to bringing world class talent into all areas of the company….”

Seasoned and experienced management was a point he also emphasized in a conference call with media yesterday about the iLike deal.

Millard is certainly that.

And, in fact, there has been a clearing out of almost all of MySpace’s former top execs and replacement with new blood–such as former Apple (AAPL), Amazon (AMZN) and Facebook alum Katie Geminder as SVP of user experience and design and Mike Macadaan, who is VP of product.

It is a process that is doubtlessly going to continue as Millard comes in and cleans house–and it will be interesting to see just what talent comes in next.

Here’s Millard in action in my video interview with her last July, in which she talks about advertising on social networking sites and lots of other stuff:

[ See post to watch video ]

(Full disclosure: News Corp., owner of MySpace, also owns Dow Jones, which owns this site.)

MySpace Finishes Its AcqHire of iLike: Don't Think Music, Think "Socialization of Content." Plus! The Internal Memo.

Peter Kafka — Wed, 19 Aug 2009 20:19:33 +0000

Now that MySpace has finished its acquisition of iLike, what it’s going to do with it? Don’t think music, MySpace CEO Owen Van Natta stressed in a press conference today, think about “socialization of content.”

What does that mean? Pretty vague, which, I gather, is Van Natta’s intention.

But in short, what Van Natta is saying is that he has bought a 26-person company–for $19.5 million–because it has engineering talent that is good at building stuff that 1) helps users find content and share it with one other, and that 2) works on multiple platforms.

Van Natta did make a point of downplaying iLike’s ability to help MySpace build out its music offering, though. Which makes sense, because MySpace already has a music platform that it owns in a separate joint venture with the big music labels.

And because while iLike is known as a music platform, it really isn’t. It doesn’t have deals with the music labels that let users listen to full songs, and it only recently launched a way for users to buy songs. What it does do is recommend music based on stuff you like, and lets you share your likes and recommendations with friends.

You can see how the people who built the iLike platform–primarily on the back of Facebook, where Van Natta was formerly COO–could be useful for MySpace, which is in the midst of a drastic overhaul.

Van Natta was brought in to run the once-hot social network at the behest of corporate owner News Corp. (NWS) earlier this year, and has been busily hiring and firing since then.

The iLike deal is Van Natta’s first major acquisition since he came on, but it is essentially a hiring move, too. The plan is to keep all of the company’s key talent, including CEO Ali Partovi, President Hadi Partovi and CTO Nat Brown. (All three are in the picture at the top of this post, along with Van Natta and MySpace COO Mike Jones. From left to right: Ali Partovi, Jones, Van Natta, Brown and Hadi Partovi.)

Speaking of that talent: Asked about All Things Digital’s report about tax issues slowing the last stages of deal, Van Natta declared that “this was actually one of the smoother sailing deals that I’ve been involved in.”

Which may be true, but it doesn’t mean there weren’t tax problems for the company he was acquiring, as well as a delay.

In one email to the entire iLike board on Monday afternoon, titled “late-breaking tax issues with iLike/MySpace merger,” Co-founder Hadi Partovi wrote, referring to his brother and also Co-founder Ali:

“Ali & I recently learned about a potential tax liability that could be significantly disadvantageous to us as a result of the merger.

“We don’t have definitive info yet, and we’re just as disappointed as anybody to learn this at the 11th hour.”

Then, Hadi Partovi sent yet another email to Gregg Winiarski, GC at IAC (IACI) yesterday, titled “potentially significant tax risks for iLike common shareholder (esp Partovis).”

Before IAC had spun off Ticketmaster Entertainment (TKTM) last year, which was one of iLike’s big investors, Winiarski had apparently been involved in some iLike issues around compensation.

So Hadi asked him: “gregg, do you have any thoughts on this? since the structure of moving into common-stock (to avoid income tax) was your idea, I was hoping you [would weigh in].”

Winiarski–in several exchanges, in which Hadi’s brother and also Co-founder Ali Partovi even asked if IAC and Ticketmaster might indemnify them if problems arose–politely declined to weigh in, presumably since IAC was no longer an investor in iLike.

Ali Partovi intently asked for a call “TODAY,” but Winiarski did not bite on that or the indemnification request.

In the end, Ali Partovi wrote: “We’re moving forward with the deal, mainly because Hadi and I are not the types to hold up a deal over this. But I’d appreciate if you’d be open to a discussion about the risk exposure we’re sustaining here.”

Apparently it did not hold up the deal.

Maybe someone can ask Van Natta about that in the all-company meeting MySpace has scheduled for next week, which he mentions in this internal memo announcing the deal:

Hi everyone,

I’m pleased to announce this morning that MySpace has entered into an agreement to acquire iLike.

iLike is a social music discovery service that in just two years has become the largest, most comprehensive music application across all social networks. With 55 million users and 1.5 billion monthly impressions, their growth speaks directly to the usability of the product, the technology behind it, and the great team that built it.

One of the great things about MySpace is that its openness enables discovery–we’re going to take that strategy one step forward by also allowing users to experience content on the distributed Web.

On MySpace, users connect with the content they love in a centralized and social environment. On iLike, users can access the content they love in a highly distributed environment across their favorite websites. This shared vision around content distribution is a key component to the future of MySpace.

What the iLike team has done with music is applicable to all of the areas that are important to MySpace users today such as entertainment, video, and games. Because we view the opportunities of this acquisition beyond the music category, MySpace Inc. will be making this acquisition separate and apart from the MySpace Music joint venture.

The company’s current management–CEO Ali Partovi, President Hadi Partovi, and CTO Nat Brown–will continue to lead iLike’s future. I’ve known Hadi and Ali for almost 10 years and the two of them, along with Nat are talented entrepreneurs with a strong track record for building world class product.

Just to give you a sense of their history and professional achievements:

· Ali established himself as an entrepreneur by co-founding LinkExchange, which started as the web’s first and largest banner-advertising network and grew to become the web’s largest small-business portal before being acquired by Microsoft in 1998. In 2002, Ali became CEO of Garageband.com and then iLike.

· Hadi co-founded Tellme Networks, a leading provider of voice/telephone technology and services, where he ran product and technology, and later spearheaded the company’s shift from consumer services to enterprise call-center automation for AT&T, FedEx, and E*TRADE. Tellme Networks was acquired by Microsoft in 2007. Both acquisitions (LinkExchange and TellMe) rank as two of Microsoft’s biggest deals to date. Hadi was also an original group program manager for Internet Explorer, a general manager of MSN.com, and he incubated Start.com (now Live.com).

· Nat has a deep and respected history as an early architect at Microsoft. He rapidly earned a reputation as one of Microsoft’s foremost technical minds by creating and evangelizing the ActiveX/COM object model in the early 90s. He went on to play a seminal role in the creation of XML, DHTML, and as a primary architect of the first XBox. After retiring from Microsoft, he served briefly as CTO at CAC Media and has informally advised numerous startups.

In addition to this great management team, iLike has 26 employees in various technical and business functions including a market leading development team that will join MySpace. iLike will remain headquartered in Seattle but our teams will be working very closely. I’m excited to see the great things that come out of the collaboration between our management teams, employees, and cultures.

We have an all-company meeting next week and I look forward to seeing everyone and answering any questions you might have.

Please join me in welcoming Ali, Hadi, Nat and everyone at iLike to MySpace.

Amazon's Digital Music Store Takes a Tiny Step Forward, Still Trails Apple by Miles

Peter Kafka — Tue, 18 Aug 2009 17:21:39 +0000

One other correction/addendum to my earlier piece about music sales and Apple’s market share: Earlier I said that Amazon’s share of the digital download market was unchanged at about eight percent. That’s actually a significant jump, says consumer tracking service NPD Group. A year ago, it pegged Amazon’s share at 5.1 percent.

That’s still a million miles away from Apple’s (AAPL) commanding grip on the digital music market–it has held steady at around the 70 percent mark for years–but it’s better than nothing. And given that it was at zero less than two years ago, not terrible.

The eight percent number sounded familiar to me because that’s the number the music industry has been guesstimating for some time. But NPD’s stats suggest that Amazon (AMZN) has been grabbing share from smaller players. Not included on the list below, for instance, are NPD data showing that Wal-Mart’s (WMT) download store saw its share drop from 1.9 to 1.3 percent. Also of mild interest: Share gains for the RealNetworks (RNWK) Rhapsody Store and, yes, Microsoft’s (MSFT) Zune Marketplace.

Here’s the breakdown (click on chart to enlarge).

But let’s be clear: The digital music download market looks like the search market in that it’s dominated by a single giant player. But it’s not like search in that there aren’t many benefits to running a download store with a relatively small audience: The small margins for music sales mean that you need to be awfully big to make this a significant business. Which is another reason to be wary of would-be music players that point to their plans to sell downloads (think Imeem, and iLike).

Sale of iLike to MySpace–$13.5 Million in Cash, $6 Million for Talent Retention–Delayed Over Tax Issues (Really!)…Plus, the List of Other Suitors!

Kara Swisher — Tue, 18 Aug 2009 06:25:06 +0000

The board of iLike planned a meeting earlier tonight to go over a buyout offer by MySpace, several sources close to the situation said. But it was suddenly canceled because of some thorny tax implications related to the talent-retention part of the deal to purchase the social music start-up.

This does not mean the pending acquisition is in jeopardy, sources said, and it could be on track to be signed as early as today, barring any more complications.

That is what both iLike and MySpace execs are hoping, said sources, one of whom described the outstanding issues as a “technicality.”

What’s also been unclear is the actual price the social networking giant is paying for iLike, which has been reported as about $20 million.

In fact, only $13.5 million will be paid upfront in cash, with about $8 million of that money likely going to one of its major shareholders, Ticketmaster Entertainment (TKTM), due to its preferred shares.

Another $6 million has been promised by MySpace in forward payments to retain some key employees–including iLike co-founders and twin brothers Ali and Hadi Partovi.

Although those employees can remain in Seattle, where iLike has its HQ, they must stay employed at Beverly Hills, Calif.-based MySpace for two and a half years to get their money.

It’s that talent part of the deal that caused the Partovis to cancel the iLike board meeting, which they explained to key investors was necessary due to some confusion over how the money paid to these employees would be taxed.

A person briefed on the issue said that if it was taxed as compensation, it would have a much higher tax rate than if it were considered long-term capital gains.

The Partovis said in the email that they were working on the problem with their advisers on the sale, Allen & Co., as well as with lawyers and accountants.

Tax snafus in the middle of a sale are not exactly the way the entrepreneurial Partovis envisioned it was going to go for iLike (see my various video interview related to iLike below) when they created the compelling music sharing and recommendation service in 2006.

After only a few years, the innovative start-up claims it has 50 million registered users overall.

A lot of that growth was due to iLike quickly becoming one of the most popular widgets on social networking sites like Facebook, where it has also been the top music application, with 10 million active monthly users.

The Partovis–who once were close with execs at Facebook (see my party video below), particularly founder and CEO Mark Zuckerberg–placed great faith in its growth lifting all Web 2.0 boats.

It did not turn out that way, though, especially from the important financial point of view, and iLike scrambled to diversify.

The iLike service recently began offering a music downloading service, for example, as well as other such features, all of which would be attractive to the music-centric focus at MySpace.

Once an Internet sensation, MySpace has been struggling to restructure itself after losing momentum and buzz in recent years, as well as a huge advertising revenue drop in its most recent quarter.

Its owner, News Corp. (NWS), replaced its founders with new management four months ago, including former Facebook exec Owen Van Natta as CEO.

After making major staff layoffs and rejiggering management, Van Natta and his new team have been working on an overhaul of the MySpace product and seem to be refocusing it to become a global music and entertainment service.

MySpace also has a joint venture with major music labels, MySpace Music, which has been trying to attract consumers and build a viable business. Sources said MySpace Music could also buy into the iLike deal or simply license its technology to improve its features.

Thus, purchasing iLike would fit in well with MySpace’s overall plans.

And iLike has also been in need of a fix itself.

For all its popularity, especially on Facebook, it has moved slowly toward profitabilty, and its $17 million in funding has been dwindling, as has its viability as a standalone company.

Back in more frothy Web 2.0 days, iLike’s generous funding gave it a valuation of more than $50 million, which has also lost steam over time and as the economy has worsened.

In the last quarter of fiscal 2008, for example, Ticketmaster wrote down its $13 million investment by $6 million.

Tensions between its execs and iLike have gotten worse over time, although some thought at one time that Ticketmaster would buy iLike.

No longer, which is why the founders turned to Allen & Co., as MediaMemo reported as far back as November, to find another big investor or buyer.

Wrote Peter Kafka: “Delivering free music on the Web has so far proven to be a high-cost, low-revenue endeavor…”

So, the New York deal-making firm ginned up a small group of suitors, which included Facebook, Activision Blizzard (ATVI) and Microsoft (MSFT), as well as MySpace.

Of the three, Activision was most serious, with interest in integrating iLike’s community and technology tools with its Guitar Hero franchise.

But Activision never actually made a formal bid, said sources.

Both Microsoft and Facebook also considered the purchase, but sources said they would only offer stock in a deal. But iLike wanted cash in the deal.

The Partovis were also was wary about working at either place.

Both Partovis, for example, had worked at Microsoft (Ali after selling it LinkExchange in 1998 for $265 million; Hadi several times, once following Microsoft’s acquisition of Tellme Networks, which he co-founded).

As it has turned out, in its short life, iLike’s last, best alternative is apparently MySpace.

“Look, iLike has been shopped around for a while, and while the team and technology are great, it only has one choice and that’s to be sold,” said one person involved in the various scenarios. “The question for the buyer then is whether it was worth it to pay up or just move on and do it ourselves.”

So until the bean counters settle this IRS nightmare, here is my video interview with Hadi Partovi about a year ago at iLike’s HQ in the Capitol Hill section of Seattle, when times were a little more hopeful:

[ See post to watch video ]

And here is a very dark and very shaky video I did when iLike threw a fete in Silicon Valley to celebrate its start-up two years ago and to send some appreciation in Facebook’s direction–it is so dated that Facebook COO Sheryl Sandberg, who is in the video, is still at Google (GOOG).

(Full Disclosure: News Corp. also owns Dow Jones, which owns this site.)

Ticketmaster CEO Irving Azoff: How to Make Money While Music Becomes "Demonetized"

Peter Kafka — Wed, 27 May 2009 16:31:16 +0000

As a longtime music executive and talent manager, Irving Azoff has had to find a way to work with everyone from inebriated rock stars to David Geffen. But he’s never had to placate Washington, D.C., before. But that’s what Azoff needs to do in order to pull off the deal of a lifetime: A merger between his Ticketmaster (TKTM) Entertainment, which dominates the ticketing business, and Live Nation, (LYV), which dominates the live concert business.

When Azoff isn’t busy trying to convince people that the merger doesn’t violate antitrust regulations, or running his ticketing company, he manages the careers of everyone from the Eagles to Christina Aguilera. Note the one thing in the music business he doesn’t spend time on: selling recorded music.

Session Highlights

[ See post to watch video ]

Live Blog

Introduction: Legendary Eagles survivor Joe Walsh, looking very much worse for wear, shows up via video to talk about his longtime manager. “Irving is the only manager that I ever knew that said to David Geffen ‘pffft,’ and he’s still here.” Also: “He’s a friend of mine….All the guys in the Eagles love him. He has a beautiful house that we bought him.”
Irving notes that Joe is now sober.
Irving rattles off his management empire: 16 management companies, handling everyone from Miley Cyrus to Willie Nelson. Country, classic rock “where the tour money is.”
Kara: Where’s the music business going? Irving: Obviously, with the “demonetization of recorded music,” everyone got into a woe-is-me attitude, but I’m enthusiastic. “Narrowcasting” of the industry has created new stars, and live business is good.

Irving: Music labels have always been slow to react to technology, and a lot of people in this room profited from that. Basically the record industry sat around and tried to protect an old model.
Kara: Could the business have reacted differently? Irving: Yeah, suing your customer is a bad idea.
Kara: Will there be record companies in the future? Irving: Yes. They have 100 years of content. They’ll be more like publishing companies, where they are a repository of rights.
Kara: How do you feel the technology business has treated the music business? [Apologies for gap, technical issues]. Eagles have generated about $400,000 in Apple (AAPL) iTunes royalties. Which is about what they get for a couple live shows.
Irving: Overall, the state of music industry is promising. Was fallow for a bit, but there’s a whole new generation of singers, songwriters, performers. “You never know where it comes from.” In terms of the business, there will be more companies than the four big labels that dominate today. “It will be a great time for entrepreneurs….It’s not over, but it’s warping into 2.0, 3.0.”
Kara: What does a music executive have to do to survive? Irving: You have to take chances. They can’t complain about the iTunes deal. They have to embrace new technology, and I think they are, and it’s easier to get deals done now.
Kara: What about these little digital companies like Playlist and iLike, which Ticketmaster owns a piece of? They can survive, and they’re excellent marketing opportunities. But they’ll have to find other ways of making money. Can they? “I don’t know.” Advertising? “I don’t know.”

Onto the merger. Irving lays out the case. Everything revolves around live music, and they’re the biggest player in live music. It’s really the promotion piece, and the marketing piece, added to Ticketmaster. Without that, Ticketmaster wouldn’t survive. “Any of you guys can write a program that does what Ticketmaster does….I’ve been there a couple of months and I have gripes myself.”
People’s gripe with Ticketmaster isn’t with what we do, it’s demand issues: People want tickets to attend sold-out shows, so we have unhappy customers. Plus we’ve been the “collection agency” for a whole bunch of fees. “But the decision is ultimately made by the act.”
What about criticism to the merger from the likes of Bruce Springsteen? “Everything we do revolves around what’s good for the artist and what’s good for the fan. That’s our new model.”
Not really an answer, Kara points out. Irving: “I would say that Bruce is uninformed about the potential of what this could be.” [Maybe someone could tell Jon Landau.] For instance, we could be bundling new songs along with tickets. “The business traditionally resists change,” so complaints about the merger are nothing news. And there’s plenty of competition: Phil Anschutz competes with us and he’s worth more than the combined market cap of both of these companies. Warner Music Group’s (WMG) Edgar Bronfman Jr. says he’s in the ticketing business, etc.
Discussion of TicketsNow, a StubHub-like “secondary market”/scalping business owned by Ticketmaster. Irving has said that in the past that he wouldn’t have bought it. Would he sell it now? Maybe.
What are the prospects for the merger? “Very optimistic” that it will get done between now and end of the year.
Back to griping about prices and availability: “People in the music industry, we’ve had a horrible record of shooting ourselves in the head.” We haven’t done enough dynamic pricing for tickets, and we should, and that will help make people happy. But these issues are fundamentally the artists’ responsibility. They decide what tickets we sell, and at what price.

Where is the music business going, overall? Who’s your favorite? “It’s like asking what’s your favorite kid.” Internet makes things very exciting, distribution is opening up. What about the industry suing customers? I think that’s a “very small issue.” We do need to protect intellectual property, and the people who make it.
Q&A: Esther Dyson wants to know what Ticketmaster/Live Nation will do with all the data they collect about customers, etc. “Any artist that calls up and says I’d like the email list of the people who came to my show, we’ll make that available.” But with regard to pricing, etc., artists and their management are not being sophisticated about how they use data. And we have to keep the press from chastising artists that use dynamic pricing.”
Q: Not clear what the question is. But seems to be about using an auction model from the get-go. “Auctions are falling into real disfavor at the moment….We’re finding that people don’t want to spend the time to participate in them.” They just want to know that this VIP package costs this much.
Q: What do you think about subscription services? “I’ve always thought subscription was an incredible model.” But tricky to pull off with labels, publishers, unions, mobile guys all trying to figure out how to split the money.
Q: Do you have specific advice for classical music artists? The great thing about the Internet is that you no longer have to be popular with everybody to have a career. Classical should flourish in this era. Build a base, get in front of people, have people like you live. “That’s been true in 1966, and that will be true as long as there is music.”
Do your artists like Twitter? Some do. “Very useful” but other artists “refuse to get a mobile phone.”

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.

A Techtastically Busy Week: A Grab Bag of Digital Stuff to Consider

Kara Swisher — Mon, 11 May 2009 13:31:58 +0000

It’s another packed week for tech, especially in Silicon Valley, where the kibitzing never ends and the econalypse is almost completely ignored.

First up this week is an event today at which BoomTown will appear called “The Free! Summit: Inside the Digital Economy” in San Mateo.

Given all the recent debate about free versus paid, as traditional media companies take aim at the issue, it should be interesting.

I will be on an afternoon panel called “Business Models That Work,” which is about the the future of news and what’s next for journalism in the digital economy.

The other panelists are: Dan Gillmor, Director, Knight Center for Digital Media Entrepreneurship, Arizona State University; Alan Mutter, Adjunct Faculty Member, Graduate School of Journalism at UC Berkeley and founder, “Reflections of a Newsosaur”; and Marshall Van Alstyne, Associate Professor of Information Economics, Boston University and Visiting Professor, MIT.

Later in the day, the event will morph into the third “Tech Policy Summit,” where I get to do a one-on-one interview with Facebook’s Chief Privacy Officer, Chris Kelly, who is still at the social-networking site but is also now running for the job of California’s Attorney General.

(My All Things Digital partner Walt Mossberg will appear on Tuesday, along with a solid slate of speakers.)

On Thursday, ContentNext Media is holding its third EconSm conference, this time focusing on mobile, in an all-day event in San Francisco.

Speakers include: Zander Lurie, CFO, CBS (CBS) Interactive; angel investor Ron Conway (see my recent video interview with him here); Eric Johnson, president and COO, Wolfgang’s Vault; Joe Kennedy, CEO and president, Pandora; and Kevin Thau, director of mobile business development at Twitter.

Wrote paidContent’s Staci Kramer: “Much has changed as we get ready for our third EconSM–including the name. The acronym is still the same but this year it’s about the intersection of social and mobile. Social media has passed the gimmick stage–although not everyone has figured that out–and is part of the daily fabric for an increasing number of people.”

And, if you have even more time, the Aspen Institute has just published J.D. Lasica’s 110-page e-book, “Identity in the Age of Cloud Computing: The Next-Generation Internet’s Impact on Business, Governance and Social Interaction.”

Lasica told me that he wrote the report after a roundtable of 30 experts in identity and technology (people like John Seely Brown and Esther Dyson) was convened in Aspen to discuss the ramifications of the cloud on a societal level.

He talked the Aspen Institute into releasing the e-book under a Creative Commons license, the first time it has ever done that.

And lest you think this is too focused on just Silicon Valley, I missed attending the Seattle 2.0 Awards last week, but here are the winners:

Best Start-up: Picnik
Best Boot-strapped Start-up: Picnik
Best Start-up CEO: Jonathan Sposato (Picnik)
Best Start-up Technologist: Nat Brown (iLike)
Best Venture Capitalist: Matt McIlwain (Madrona Venture Group)
Best Angel Investor: Geoff Entress
Best Start-up Product Designer: Peter Roman (Picnik)
Best Service Provider to Start-ups: Shannon Swift (Swift HR Solutions)
Best Blog from/about Start-ups: TechFlash/John Cook
Best Social Event for Start-ups: Lunch 2.0 by Josh Maher

Imeem Asks Big Music for Help; Gets Some, Needs More

Peter Kafka — Fri, 27 Mar 2009 11:54:59 +0000

Since everyone wants to weigh in on the state of online music service, imeem, let me add in my two cents: The once-buzzy start-up isn’t on life support yet. But it sure could use some help–just like every other Web music player.

I can confirm that the company has sought, and received, new terms from some of the big music labels, most notably Universal Music Group. One big label that hasn’t given imeem any concessions yet: Warner Music Group (WMG), which owns an equity stake in the company.

Wired.com has a nice summary of the reason imeem needs new terms from the labels. But the short version is that the original deals it had in place meant it lost money every time someone played a song. And that the more popular it got, the more it lost.

That kind of business plan isn’t out of the ordinary for Web companies that struck deals with the big music labels–even Google’s (GOOG) YouTube has a similar kind of arrangement. But those deals, which were supposed to make sense once the online advertising business kicked into gear, are also obviously no longer sustainable.

The big picture: imeem went looking for buyers last fall–at the same time that its venture investor Sequoia Capital began lecturing start-ups about the need to cut costs–and hasn’t found any.

That puts Imeem in the same boat as every other notable online music service, including iLike and Pandora, all of which have been looking for money or an acquirer during the last six months.

One of them–Spiralfrog–finally shut down earlier this month. And if the other start-ups can’t get the labels to cut them some deals, Spiralfrog will have company.

Sony, Warner Music Pull Full Songs From iLike. Look Out, Theoretical Facebook Music Offering!

Peter Kafka — Thu, 04 Dec 2008 17:00:18 +0000

Last summer, iLike rolled out a new feature: Visitors to the upstart music site would be able to listen to entire songs from all the big music labels for free, via an arrangement with RealNetworks’ Rhapsody, which already had a license deal with the big guys. But Sony (SNE) and Warner Music Group (WMG) have since pulled their songs from iLike.com, say people familiar with the situation.

PR reps at both Sony, Warner and Real declined comment. iLike offered this statement:

From day one, iLike has offered only music that is fully licensed from copyright holders, via a combination of direct licenses as well as third-party relationships such as Muze and Rhapsody. From time to time these arrangements are renewed and re-negotiated, and sometimes it’s hard to avoid temporary outages in the middle of discussions.”

This isn’t a huge problem for iLike, as the “outages” only affect the offerings at iLike.com itself, and not iLike’s popular Facebook app, which is the core of its business. That’s because the Facebook app has never offered users the chance to listen to full songs from the big labels. And iLike has other pressing issues to deal with: The company is actively looking for buyers.

But it does point out one of the challenges that iLike and anyone else who wants to build a music service, or extend an existing one, face: They can’t automatically assume that someone who has deals with the music labels, as RealNetworks does, can take those deals and transfer them to a new service.

This has particular implications for Facebook, which is still exploring the possibility of launching its own music service. If Facebook wants RealNetworks (RNWK) or any other existing music service–like, say, MySpace Music–to operate a music offering on its behalf, it’s going to have to get the labels themselves to sign off on the deal. That’s not an impossible hurdle–note that RealNetworks has been able to offer free music at Yahoo (YHOO) since this fall–but it will slow things down.