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There’s been a bunch of coverage of the iLike acquisition deal over the past 24 hours including those that call this a massive blow Facebook. The primary “losers” in this supposed $20 million MySpace acquisition is iLike, who has been struggling to find a breakthrough business model. There’s also an underlying story about how the Partovi brothers and Mark Zuckerberg grew apart since the early launch of the platform.
Kara Swisher sums it up beautifully:
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.
This means a number of things but primarily that iLike is being sold in a fire sale and that MySpace is moving quickly to focus on their music business. While there is a fair amount of irony in MySpace owning one of the largest Facebook applications, this is not a huge blow to Facebook. With MySpace owning a large Facebook application, it highlights the true openness of the Facebook platform.
Should Facebook have made a bid for iLike? Maybe but considering that most online music sites haven’t come up with an effective business model, it would only be a distraction. While Facebook had at one point been in discussions with record label executives, nothing has appeared to materialize which may be a good thing since the only company that’s highly profitable in the online music space is iTunes.
Facebook needs to focus on building a robust platform that serves the needs of the developers. While the platform may not have served the needs of iLike, there is still a lot of room to grow and trying to build a music business at the same time doesn’t make a lot of sense. For now, the roller coaster ride for the Partovi brothers has apparently ended in MySpace’s hands.
First, according to Techcrunch, Facebook *did* make a bid for iLike.
Second, you can be sure that if the iLike & Facebook founders had disagreements, then it would not be due to personal conflict, but business disagreements. Not around trivial things like “they’re not increasing our notification allocations”. iLike alredy has 10MAU. But about major strategic differences: like Facebook wanting to enter the music field.
Third, maybe iLike has figured a business model and maybe not. But they have been profitable in the previous 6 or so months. And if a company with dozens of employees is profitable, then that’s millions of dollars in revenue per year.
Personally, i dont want facebook to get into music! i honestly believe that both facebook and myspace can co-exist without competiting with each other.
look at myspace, instead of focusing on one or two areas, they tried to be everything to everyone and failed - if facebook tries, they WILL fail too.
Myspace should dominate music and use a coke/pepsi approach
Facebook should dominate ’sharing’ and use a mcdonalds approach.
imagine being able to walk into your nearest mcdonalds store (facebook) and ordering a coke (music) - or imagine being able to walk into your nearest supermarket (blogs) and ordering a coke (music) from the vending machine (widgets).
Mcdonalds focus’s on food, while cocacola focus’s on the drink - this is the approach that ilike has been using successfully for years and i hope myspace uses it.
Yeah, i completely agree. In fact, i wrote a post called MySpace & iLike - it doesn’t make sense as parts of the deal and PR just don’t make sense to me