MySpace acquires iLike in effort to reinvent itself as an entertainment portal

News Corp's MySpace officially announced its agreement to buy music recommendation service iLike. The acquisition comes as News Corp owner Rupert Murdoch has pressed to reinvent MySpace as an entertainment portal, taking advantage of its continued strength in areas like music and movies. MySpace declined to disclose financial terms of the acquisition that brings iLike's twin brother founders Ali and Hadi Partovi and Nat Brown into the MySpace fold.

The site was backed by venture capital funds and Ticketmaster Entertainment. Earlier in the week, several blogs, including AllThingsDigital, reported that iLike would be bought by MySpace for around $20 million.

iLike is best known as a popular social music discovery service on Facebook, the social networking site that has overtaken MySpace as the top Web destination for friends and family to share photos, messages, video clips and other media. MySpace, which was once the most popular and fastest growing social networking site just two years ago, has lost ground with users who have moved onto Facebook or other sites. According to data received from Nielsen, time spent by users on MySpace fell by 31 % between April 2008 and April 2009, while user time on Facebook grew 700 % in the same period.

Van Natta, MySpace Chief Executive Owen, said on a conference call that iLike's social discovery technology can be extended to other areas for MySpace users beyond music, areas such as entertainment, video and games. He explained this is why MySpace, rather than MySpace Music, made the acquisition. MySpace Music, which launched last September, is a joint venture between MySpace and the four major music companies EMI Group, Sony Music Entertainment, Warner Music Group and Universal Music Group.