Imeem is one of Sequoia's portfolio companies, so it doesn't come as a surprise that it is looking to keep its budget under control, but we do think that Imeem is going to have a hard time finding a buyer in these tough economic times.

Update: We just got a response from Imeem. The company is indeed laying off 25% of its staff (20 positions) in order to cut cost, but wouldn't comment on the rumors around a potential sale of the company.

Imeem's last funding round was a Series C round led by Sequoia in April, though the company did not reveal the actual amount of this investment. Warner Brothers also invested about $15 million in Imeem. Imeem has licensing deals with all of the major record labels, as well as with a large number of independents labels.

$200 Million

While Imeem's valuation is a bit hard to estimate, PaidContent reports that Imeem and its investors would be looking for somewhere "north of $200 million." Given the current economic climate and the strong competition in the streaming music business, $200 million might be a rather high number, however, and this will surely scare off quite a few potential buyers.

Big words indeed. To see if that You Tube comparison was justified, let's check back in with Imeem one year later and assess how they're doing now.

The tale of the tape is usually a good indication of growth; and according to Compete Imeem has actually declined by 10.5% in unique visitors this past year. The chart below doesn't include Facebook and MySpace, because they are much larger than Imeem. While Imeem is still larger than last.fm and Pandora, the chart below shows a definite dip - whereas last.fm and Pandora grew.

If we add in MySpace and Facebook, you can see the gulf between Imeem and the other two large social network players. We also see the massive growth of Facebook over the past year; it passed MySpace in Dec '08 - Jan '09 according to this data.

Statistics don't tell the whole story of course, however we've also seen other evidence of problems at Imeem. The company appears to be under pressure financially - in October '08, Imeem laid off 25% of its staff. The product is also under strain. In late June this year we reported that Imeem will remove photos and videos from its features, in order to simplify the service and focus on the service's core social music features. That move did not go down well with Imeem users.

We also note a relative dearth of news this year - just 2 news announcements at Imeem so far this year (into the 8th month), both about Imeem Mobile. Our review of Imeem Mobile was tepid.

We don't want to be too negative. There's much still to like about Imeem - its design has improved and the list of record labels is impressive. But it's obvious that the hype that we saw one year ago (including our own comparison to YouTube!) just hasn't panned out.

With Miley Cyrus now draped all over the Imeem homepage and Jonas Brothers in the default playlist, it seems that the site is now aiming to attract the teeny bopper audience that perhaps MySpace and other online music sites don't serve too well. That's great, but it's far from the diverse mainstream audience that Facebook and MySpace attract.

Unfortunately, Imeem is heading the wrong way in terms of its growth. And there are newer, arguably better music streaming services rising up - Spotify has gotten rave reviews so far from international markets and it's about to launch in the U.S.

Can Imeem turn it around? Let us know your thoughts on Imeem in the comments.

Update: Matt Graves, imeem's VP of marketing and communications, left a comment below. Comments on the imeem blog post are now open, VIP subscribers will be able to get a refund.

The original post continues below:

Unhappy Users and VIPs

It's not surprising, however, that imeem's users are quite vocal about their dissatisfaction with the service's decision to delete the photo and video collections that many have poured quite a few hours of work into over the years. A lot of users are especially outraged by this because they specifically subscribed to imeem's VIP service in order to upload more of their own videos and photos. It's also noteworthy that imeem isn't giving users an easy way to download their content from the site. While users could right-click on every picture and save it to their desktop, there is currently no way to download videos from the site.

Not Handled Well

Overall, we would have to side with imeem's users and it doesn't look like the company is handling this current affair very well. Comments on the blog post are closed, nobody from imeem's staff (as far as we can see) is interacting with customers on imeem's forums, and the service isn't giving paying customers a chance to get a refund. imeem, of course, is under some pressure to make a profit at some point, and the service's relationship with the music industry has been rather rocky lately, but this decision to give users only five days of warning before deleting their content on the site just feels like a textbook case for how not to manage your user community.

The most notable changes are a new homepage for the site and a modified navigation menu you see at the top of every page. Also some new features have been introduced. Summarising from the Imeem blog post:

Spotlight: features the latest music, videos and entertainment people are posting on imeem. Expect to see "exclusive new music, popular videos, and celebrity playlists from your favorite artists."

Discover: gives you personalized recommendations of music, videos, artists and people, based upon your listening and viewing habits and those of the people you are connected to in the imeem community.

Browse: offers chart-based browsing of any media content (music, videos, photos and more) based on its popularity site-wide. You can now filter by content type, genre, and popularity in the imeem community.

Artist Pages: You can now search to find new Artist Pages, which pull everything posted by the community related to that artist into one page on the site. Also features the complete catalog of content created by the artist and a list of who else is a fan on imeem.

My immediate reaction is that the re-design is less cluttered than the previous design. When I did a search on Nirvana, I discovered some videos I hadn't run across before and my favorite feature of Imeem - the playlists - are more easily accessed and explored. Also finding new friends based on music taste is easier.

The Artist pages are excellent, full of links and videos to delve into:

Up till now I've mostly just dipped into Imeem to listen to cool music I haven't been able to find elsewhere. In the past I've tried to navigate around and explore, but found the process difficult. This new design appears to encourage more exploring of music and linking with other people with similar tastes. So I'll be giving it another try as a music social network.

Add to this new design the existing innovative features of Imeem, such as the March launch of a developer platform that enabled read/write access to user information, widgets that can be embedded practically anywhere (unlike its competition MySpace Music), and rich apps like Fanbase (an Adobe AIR app that Atlantic Records created in collaboration with Imeem) and you have a site that continues to make listening to music online a pleasurable experience.

If you're a fan of Imeem, let us know in the comments what you think of the new design.

Upload with AIR - Play Over the Air

You upload your music with an Adobe AIR app which allows you to upload songs directly from your hard-drive, but also has a convenient option that lets you browse your iTunes library to pick songs you want to transfer to imeem. In our tests those uploads worked just as expected and went relatively fast. The sounds quality was also surprisingly good.

Similar to the iPhone apps from Pandora, Last.fm, and and Slacker Radio, you can also easily create custom radio stations, though the functions here feel a bit limited compared to the options that imeem competitors now offer.

Like its competitors, the app suffers from the fact that it can't play in the background on the iPhone. Sadly, imeem also doesn't remember where it left off after you exit the app.

Pricing

You can store up to 100 songs, 10 videos, and an unlimited amount of photos on imeem for free. For $30 a year, you can upload up to 1000 songs and 100 videos, and $100 a year buys you storage for 20,000 songs and 500 videos.

Alternatives

We are also big fans of Lala, which allows you to listen to all of your songs online without any restrictions. Sadly, though, Lala does not offer a mobile application.

If you want full access to the music on your desktop while on the go, Simplify Music 2.0 also does a great job at streaming your collection over WiFi, Edge, and 3G. One of the nice features of the Simplify Music app (iTunes link) is that it gives users easy access to lyrics and artist biographies. Imeem only provides access to artist biographies.

Verdict

Given the quality of the apps that imeem's competitors have released, this app still has a bit to go before it can fulfill all of its promises. However, if you are looking for a simple way to expand the capacity of your iPhone or Android phone then imeem might be worth a look, especially if you don't keep your music on a home server where you can easily access it with Simplify Media or Simplify Music.

The acquisition was announced just yesterday, and developers were given no warning that their creations would become useless digital paperweights overnight. Among the detrius of the deal is twt.fm, a popular Twitter music-sharing app created by web dev Lee Martin, who tipped us off to his plight today in a blog post.

UPDATE: Users are also reporting problems with blip.fm, a popular music-streaming site that integrated results from iMeem.

"They represented the music business of the future. Now they are a forced hyperlink to a... MySpace landing page making false promises and giving no guidance or help for the developer community they just destroyed.

"Maybe MySpace will return my open streaming API platform... Until then, I'll be brushing the dust off my 1999 Dell computer and getting ready to program music websites like I did 10 years ago."

If indeed MySpace doesn't give developers back their iMeem API, will another streaming music service step in to fill that void? Pandora CEO Tim Westergren revealed in a recent interview that because of licensing issues, Pandora is nowhere close to releasing an open API. Last.fm has an API that allows for web, desktop and mobile development - and it's ironic that Last might have the last API for music mashup developers.

While we wait for comment from MySpace HQ, let us know in the comments what you think of this news, especially if you're a developer who has been using iMeem's API.

The new platform is a Flex and ActionScript API that will let developers create customized music players, access activity data and build things like recommendation engines, smart playlists and music games.

Video and photo data will also be accessible via the API.

Good Signs Imeem Could Explode

The Imeem user experience is a good one - the company claims nearly 26 million users and 65 thousand new registered users every day. The fact that they have licensing deals with all four major labels and "80% of the indy music market" means you can find almost anything you'd like on the site and listen to it for free. The site is trouncing Last.fm in traffic and perhaps will win some more press eyeballs to go with all its users now that it's offering a platform.

The company has been around for more than three years, has raised an undisclosed sum of venture funding and was started by people from companies like Napster and Tivo. Imeem acquired Napster founder Sean Fanning's Snocap late last year.

In a December article predicting that 2008 will be "the Year of Free," Mark Mulligan of Jupiter Research called Imeem's wrapping up its licensing wish-list "perhaps the least heralded yet most significant development" of 2007.

Caveats

The company had some pretty uninspired answers to my questions about data portability, but did say that they hoped their music service could someday play the kind of role that Amazon's S3 plays for other data.

In order to get to that point, though, they believe they need to prove to the major record labels they license from that there are a good number of software developers who want to "do the right thing." That too is rather unconvincing as by most accounts the record labels are learning fast that free digital distribution is the direction things are going in. They just need to know that they'll get their money. The Imeem player is already distributable, but we'll see how things play out.

Imeem seems to be doing a good job of getting them their money, but perhaps that's not as true as it seems and the closed platform is necessary to try and figure out new monetization mechanisms.

Watch that space and in particular watch to see if the massive Imeem app platform can jump the fence and run wild around the rest of the web.

Check out this embedded playlist below, for me at least it's bandwidth challenged right now. Seeqpod is running circles around it tonight, but Imeem has been working well for me most of the afternoon. After pressing play and waiting a couple of times I see now that these are just 30 second clips, unlike the players on-site where you can listen to whole songs. Seeqpod seems cooler, but they are being sued.

In fact, this embedded player from Imeem was so bad I had to remove it. The on-site experience is great, though. Someday, hopefully, the announcement made tonight will lead to Imeem living outside its own walls.

As SfGate.com reported tonight, Imeem is the third-largest social network in the United States after MySpace and Facebook; and it's now the No. 1 streaming music site in the US.

King of the Online Music Deal

There's a lot to like about Imeem. Starting with the music. As we noted in March Imeem has licensing deals with all four major labels and "80% of the indy music market", which means that you can find almost anything you want on the site and listen to it for free.

The user experience is also great - it's also another of an increasing number of sites powered by Adobe's Flex and Flash technologies. And check out Fanbase, an Adobe AIR app that Atlantic Records (a subsidiary of Warner Music Group) created in collaboration with Imeem. We reviewed Fanbase recently and said it is "no ordinary desktop music player". We explained that instead of simply streaming tunes, Fanbase lets you connect with other users through an integrated chat feature while also viewing a continuous feed of both the official and the unofficial news, photos, and videos. You can also customize the app by choosing which artists you want it to display from the dropdown menu or the "Manage" screen.

Imeem Lording it Over MySpace Already

Imeem is leading the charge in the free, ad-supported online music market. It has deals with all four of the major record labels: EMI, Universal, Sony and Warner Music. In contrast, MySpace only has three of them - EMI hasn't signed with MySpace. What's more, according to SFGate Imeem also has a deal with Viacom's MTV Networks to show videos from Comedy Central, MTV and VH1.

Together with the launch of its platform in March, Imeem also has an extensive widget program in place. This means that Imeem music can be listened to on a wide range of websites - giving it another advantage over MySpace.

Imeem has a second-to-none pedigree in Internet music, having been started by people from companies like Napster and Tivo, and acquiring Napster founder Sean Fanning's Snocap late last year. To be fair, MySpace has a pretty decent background in music too - it was said to be the driving force behind MySpace becoming popular in the first place.

In terms of users, Imeem had more than 27 million unique visitors in June according to comScore and it has 65,000 new users register each day. The company also says it gets more than 85 million total unique visitors of its widgets. These are impressive stats, although MySpace is still much bigger - with an estimated 120 million users.

But Can it Earn Money?

It's not necessarily all rosy. According to a recent CNN article, Imeem may struggle to earn a decent revenue. It estimates that Imeem is getting an average CPM of $4 per page, which CNN thinks is insufficient to pay the record labels. CNN states that the major labels control 86% of all album sales in the United States and that they "generally want to be paid about a penny each time someone listens to one of their songs at a website like Imeem." However Imeem counters that they have "ad revenue-sharing" arrangements with the record companies, rather than the standard penny-a-song contracts. Also Warners has invested in Imeem. The same CNN article estimates MySpace Music revenue will be around $3 CPM, so even here Imeem seems to have the upper hand.

Both Imeem and MySpace will continue implementing alternative revenue models. For example Imeem had a deal with movie star turned musician Scarlett Johansson, who released her album "Anywhere I Lay My Head" exclusively on Imeem in May.

Conclusion

There's no doubt that Imeem has serious momentum, and backing (Sequoia Capital and Morgenthaler Ventures are investors). With all 4 record labels behind it and an especially cozy relationship with Warners, together with traffic that is rocketing upwards, Imeem appears poised to tip big time into the mainstream. You cannot of course count out MySpace Music, it is a joint venture after all with 3 of the 4 big record labels. But Imeem's growth rate and buzz is reminiscent of that of YouTube just before it got huge.

Watch this space, or should we say listen to it.

Don't be fooled - this is app is no ordinary desktop music player. Instead of simply streaming tunes, Fanbase lets you connect with other users through an integrated chat feature while also viewing a continuous feed of both the official and the unofficial news, photos, and videos. You can also customize the app by choosing which artists you want it to display from the dropdown menu or the "Manage" screen.

To create Fanbase, Atlantic Records collaborated with imeem, the music social networking site that lets users upload, create, and listen to music. Through the integrated imeem music player, Fanbase will automatically capture the latest music from any particular artist and stream it directly into the player. Fanbase's video content comes from YouTube and Brightcove and the chat feature is provided by Meebo.

"We're always looking to elevate the experience and interaction our fans have with our artists," said Eric Snowden Creative Director of Digital Media for Atlantic Records. "Through Fanbase we're delivering that experience digitally, on-demand and in a manner that allows fans to create a much deeper connection with their favorite artists."

We only wish that an app as rich as Fanbase wasn't limited to just one record label - a collaborative effort between labels would have really made Fanbase a killer app. However, if your favorite artist is with Atlantic Records, you may want to give it a shot. To try Fanbase for yourself, you can download it from here.

The makers of the "Google phone" - and the developers who hope to build apps for it - have had the opportunity to watch Apple over the past year, learning from their mistakes - and their successes. One of those lessons learned? People want apps. Let's take a look at three of the first Android apps out of the gates.

One of the leading streaming music services and a frequent subject of ours, imeem, plans to "make Android sing" with its streaming social music app that delivers the power of imeem's user recommendations to the mobile platform. According to imeem, the app will have seamless integration between the mobile app and the imeem site.

Not to be outdone on the social front, MySpace has announced the MySpace Mobile App for Android which promises to bring a number of the site's features to the mobile platform, including providing status updates, uploading photos, and approving friends.

App store drama rears its head

Getting apps to users right of the gates was clearly motivated by the hindsight of Apple's reticence to do so. The Android team definitely made the right decision in that regard.

One of the mistakes that the G1 appears doomed to repeat, however, is the management of those applications in the Android Market, the distribution hub for Android applications.

Android Community reveals that the more than 50 apps which could appear in the Market have been whittled down to 13 lucky applications. According to Android Community, "many of the top applications that have been reviewed already will not be there."

Will this initial selection result in the same turmoil it has for Apple? Or was this simply a means of staging the rollout of apps? The answer to that question remains to be seen.

Surely more to come

While we're getting down to the wire, there's still a lot of time before the G1 comes out on Wednesday. No doubt, this is just the beginning of the information we'll be seeing on new Android apps. Stay tuned to ReadWriteWeb for the latest news as it becomes available.

MySpace Mobile image courtesy Android Community

Lachlan said that his favorite 3 things online were Twitter (www.twitter.com), Tumblr (www.tumblr.com) and Fire Eagle (www.fireeagle.yahoo.net).

There are literally thousands of great web apps to choose from, many of which have been profiled here on RWW. Tell us your current 3 favorites in the comments. We'd especially love to discover new things that may be flying under the radar...

Cat photo: Kevin Steele

We started out by asking about the increasing competition in online music this year.

RJ: The space is crowded, I agree, and people now have a lot of choice if they want to listen to music for free. That's great for music fans - but what it means is that navigating through that mass of music is now the priority for them. It's all very well having millions of tracks at your disposal on Myspace or Imeem, but what's the use if you can't find what you want?

We have a unique recommendation system, drawing on the data of over 43 million individual songs, and the listening habits of 25 million music fans, enabling us to guide users through a 5 million + catalogue of freely streamable tracks and help them find stuff suited to their taste.

Recommendation and discovery is key in this space now - and we've been working on this for 6 years, and every day we continue to refine the process, so we're confident that we can continue to offer a better, more personalised music experience than anyone else online.

RWW: One of the things that's made Imeem a success this year - it's reportedly now the No. 1 streaming music site in the US - has been its licensing deal with all 4 of the major record labels, plus by their estimates around 80% of the indie music market. MySpace Music has 3 of the majors and has been criticized for its lack of attention to the independents. Can you clarify for our readers where last.fm sits in terms of licensing with the 4 majors and independents?

RJ: We have music from 3 of the majors, and renegotiations with Warner are ongoing. Our indie catalogue is equivalent to Imeem's - it includes millions of tracks from IODA, The Orchard, CD Baby and thousands of independent labels and artists - and we are currently in negotiations with Merlin. We continue to aim for the most comprehensive music catalogue online, and are making great progress towards that.

What's even more important, though, with regards to this point, is that we ensure all labels and artists are paid when their music is streamed on the site - and since the launch of our Artist Royalty Program, that means unsigned and DIY artists too. No one else is offering a share of revenue to unsigned musicians in this way.

RWW: You recently released a new version of the last.fm iphone app -- how crucial do you think mobile apps will be when competing against the likes of MySpace, Imeem and Pandora? Do you think you have any advantages over your rivals in this area?

We want the Last.fm experience to be accessible everywhere, so mobile is hugely important to us. At the moment the iPhone dominates, and our only competition there is really Pandora, which is limited to the US whereas our app is available in the US, UK, Canada, Germany, Spain and France, with more countries to come. Plus it's much more feature-rich and draws on a much larger music catalogue.

It's a cool app and I think it's the one that real passionate music fans choose because we really reach into the Long Tail in the music we play.

See also: Interview With Last.fm Founder Richard Jones: Part 2, Business Models and Part 3, Design & Features

To listen in and participate in RWW Live today, click here or tune into the widget above. Select Episode 6 (note: currently Talkshoe is experiencing technical issues, we hope episode 6 will be available soon.) Update: episode 6 is now available.

Don't forget also to vote in our current poll: What are your favorite online music streaming services?

Seeqpod searches MP3 files uploaded independently all around the web; it's a great way to explore music and build playlists, and so far it's been a good way to pipe music into a wide variety of other websites. Starting next week, developers will be required to pay $3 for every 1000 search queries performed on their sites powered by Seeqpod. They will also have the option to put up $5k to license the Seeqpod crawler and index.

We've contacted the company for comment but haven't heard back yet. Developers say that the company changed its API this morning and they are having trouble accessing the service. Semantic social search company HeadUp has published a solution to that problem.

We're surprised that there has been no discussion of a free level of service. According to a credible-looking internal email passed along to us: "Starting April 1 SeeqPod will begin charging all API partners $0.003/query ($3 for 1000 queries) -- payable via credit card or Paypal." There's a chance that this is an April Fools joke, but it wouldn't be a very funny one.

Looking over the ProgrammableWeb list of APIs tagged music, it appears the most likely candidate to replace Seeqpod as a free music API is Imeem. That company's TOS says it reserves the right to start charging for access to its data as well. Imeem doesn't appear to be as wide open as Seeqpod has been, either.

Some developers pull audio in from music videos on YouTube, but that doesn't seem like a sustainable solution. That's what our favorite music search site, Songza, does: Imeem plus YouTube with ads on screen. It may have been too good to be true: any song uploaded anywhere by anyone, for free, forever!

On some level the disruption can be blamed on the major labels' fear of free music on the web and the belief that by making content easier to discover online Seeqpod is facilitating theft of intellectual property. (Imagine if search engines had to verify the legal status of everything they pointed searchers to!) Ultimately, though, if what Seeqpod is doing were easy then we expect lots of people would be doing it. It's inevitable that the company is seeking to make some money.

We're concerned about this making it more difficult for late-night coders around the world to bust out a shocking new interface for listening to music, but we presume that innovation will live on - even if inconvenienced. We hope it works out for both Seeqpod and the developers who require free access to music in order to do what they do.

SearchMe, which combines a search engine with a highly visual, CoverFlow-like interface, has seen rapid growth over the last few months and this new feature will surely help the company to attract even more users.

One of the best features of SearchMe's new music search is that it automatically plays the next item after a song is finished. Thanks to SearchMe's 'stacks,' which are basically SearchMe's more visual take on bookmarks, you can now use SearchMe to build your own mixtapes and integrate them into your blog or social network page.

Neither Imeem nor SearchMe have made any announcements about a partnership, but it seems likely that SearchMe is just using Imeem's API to power this new feature.

The only negative aspect of this new feature we have found so far is that there doesn't seem to be a way to stop the embedded music stacks from automatically playing as a page is loaded. Because of this, we decided not to embed a custom mixtape in this post, but you can find one here if you want to see (and hear) what this new feature looks like.