A couple of weeks ago we talked about how CBS' new online strategy was to partner with as many Web 2.0 sites as possible and spread their content around. Today, CBS seems to have deviated from that plan by announcing that they will pay $280m in an all cash deal to purchase music social network Last.fm.
This is the largest Web 2.0 acquisition in the United Kingdom ever, according to the BBC. Last.fm, which is five years old and earlier this year added a video component to its site, has about 15 million active users. Last.fm said they have been approached multiple times in the past about acquisition, but decided CBS' offer was the right one at the right time.
"Last.fm is one of the most well established, fastest growing online community networks out there," said CBS President and CEO Leslie Moonves. "Music has the unique ability to unite large groups of people and engage them around a shared passion. Part of our interactive strategy has been to build communities around all of our properties. CBS Radio has given us a powerful way to create such communities for decades, and it continues to do so. With Last.fm we're adding a next-generation platform to allow audiences to communicate with us and each other as never before."
Moonves repeated the line given by CBS Interactive President Quincy Smith last week that CBS is transitioning "from a content company into an audience company," and said that Last.fm will help the company attract a younger audience.
The acquisition seems to be a slight deviation from the Audience Network strategy that CBS has been pushing. Smith famously told the Wall Street Journal earlier this month that CBS couldn't expect users to come to them and instead had to spread their content around. Purchasing a single distribution point seems dissonant with that sentiment. But this acquisition makes sense, too.
CBS is the owner of one of the largest terrestrial radio groups in the United States with a large number of music stations. Extending their reach online is a good idea. Further, considering how well the MySpace acquisition has turned out for rival media conglomerate News Corp. (Fox), acquiring a fast-growing social network certainly appears smart. And since Last.fm already embraces the idea of spreading their content around (via widgets), they fit well with the new CBS strategy.
CBS has moved beyond simply courting Web 2.0, they're now in the business of buying Web 2.0 as well. DO you think this is a good move for them?
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I'm not sure if it's a good idea for them, but what does this mean for the users of Last.fm? All their information is now property of Viacom. How do they feel about that?
Posted by: Neil | May 30, 2007 10:22 AMActually CBS is separate from Viacom now (though both are owned by National Amusements).
Last.fm's founder said on their blog, "The openness of our platform and our approach to privacy won’t change." The team will stay intact and in London, and they say the focus of the site will remain the same. So if you trust that, then this shouldn't mean too much from the user perspective.
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Posted by: Josh Catone | May 30, 2007 10:28 AMI would have thought this would have been a better acquisition for Apple. I'm not sure how this would integrate across other CBS properties.
Posted by: Christopher Walken | May 30, 2007 12:02 PM