Music site Last.fm bought by CBS
Social music site Last.fm has been bought by US media giant CBS Corporation for $280m (£140m), the largest-ever UK Web 2.0 acquisition. — The online network was founded in the UK five years ago and it now has more than 15 million active users.
Context & Ripple Effects
Last.fm had been extending its personalized music model into user-created video channels and described its ambition as becoming a Web 2.0-era MTV. CBS had also completed its purchase of finance-video blog Wallstrip, placing the Last.fm deal within an emerging push to add internet-native content and communities to its media portfolio.
The $280 million price, described as the largest UK Web 2.0 acquisition, makes the purchase a visible valuation benchmark for social-media businesses with large active audiences.
First-order effects
- CBS takes ownership of Last.fm and its reported base of more than 15 million active users, bringing the UK-founded social music service inside a major US media company.
- Last.fm gains the resources and strategic direction of CBS as it develops its music and video offerings.
Second-order effects
- CBS must turn Last.fm's audience and personalized channels into a complement to assets such as Wallstrip, rather than leaving each acquisition as a separate web property.
- Other social-media startups gain a concrete $280 million reference point in negotiations with media buyers, with user scale and content features becoming central evidence of value.
Third-order effects
- If large media groups continue buying community-driven web services, online distribution shifts from standalone startups toward portfolios controlled by broadcasters and publishers.
- The deal tests whether a media owner can preserve the participation that made a social service valuable while fitting it into a larger commercial content strategy.
The trend: Major media companies are using acquisitions to obtain online audiences and personalized content formats that their traditional channels do not organically provide.