CBS Corp. has acquired Last.fm, a global, community-based, music discovery network, for 280 million in cash. It currently has more than 15 million active users in more than 200 countries. Founded in 2002, the company creates communities around music by bringing together listeners, artists and music. Through its "scrobbling" technology and social recommendation engine, Last.fm builds a comprehensive profile of each user's musical taste and leverages each user's song list to make highly personalized recommendations, connect users who share similar tastes, provide custom radio streams and other music related community features. In addition, the site has an events listing that can recommend over 200,000 festival and music events globally.
This acquisition follows a number of CBS Interactive announcements including the purchase of Wallstrip.com, investments in Joost and Spot Runner and the recent expansion of the CBS Audience Network to include a total of 25 online partners.
"Last.fm is one of the most well established, fastest growing online community networks out there," said CBS Corp CEO Les Moonves. "Their demographics also play perfectly to CBS's goal to attract younger viewers and listeners across our businesses. Last.fm adds a terrific interactive extension to all of our properties and also is a huge step in CBS Corporation's overall strategy of expanding our reach online to transition from a content company into an audience company."
As part of the acquisition, the Last.fm team, including founders Felix Miller, Martin Stiksel and Richard Jones, will continue to independently run the online network. The Last.fm management team will work with all relevant CBS divisions to apply their community-building and technology expertise to extend CBS businesses online and within the mobile space.
Together, Last.fm and CBS plan to offer a new way for people to consume media. Part of CBS's interactive strategy has been to build communities around all of its properties. See agency comments in Ad Business Report.
Said Moonves: "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."
RBR observation: Last.fm is the 11th ranked music site and 34th ranked social network, globally, according to Bank of America Equity Research. The goal is likely to utilize CBS' other media properties to gain a better foothold in the social networking space, and use this as the springboard via its radio listeners. CBS didn't pay much for Last.FM, so it intends to do the heavy lifting itself. As well, most of the CBS Radio websites aren't very developed, so this may be a good shot in the arm for them.
CBS tells us the details of monetization and cross promotion are still being worked out, but it is looking at a number of ways to further monetize the site such as offering sponsorships to clients – for instance a client could sponsor a country music stream for a month. We figure the venture will likely begin harvesting radio listeners before television viewers, because of the music focus.