Could iLike be a game-changer for MySpace?

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These are grim days for MySpace, once the king of the social networking heap.

Millions of Americans still use the site, but in recent months, it has been consistently beaten by Facebook, often by an embarrassingly large margin. Worse yet, MySpace, which was purchased by News Corp. in 2005, is fending off attacks from a batch of young upstarts, including Twitter. “MySpace is not firing on all cylinders like Facebook,” social networking expert Ray Valdes told CNN.com in June. “Their effort to improve the site seems to be fragmented. They need to get on track or they will continue to slide.”

Well, someone in MySpace headquarters was listening. According to TechCrunch, the social network is "close" to acquiring a service called iLike – for the sum of $20 million. As TechCrunch's Michael Arrington notes, if the deal goes through, it will be "MySpace's first acquisition since new CEO Owen Van Natta took control of the company in April 2009." In addition, a potential agreement could herald a new direction for MySpace, which has struggled to find its niche in the changing media landscape.

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iLike bills itself as "the Web's leading social music discovery service and the dominant music application on the Facebook, Orkut, hi5 and Bebo platforms." The site functions on a variety of levels – it is a recommendation engine, like Pandora, and it is a networking site, like Facebook. The band pages on iLike are second only to MySpace's in popularity; according to a relatively recent tally, 50 million users have active iLike accounts.

More important, since Facebook doesn't have its own music application, iLike is how many Facebook users listen to and share tunes. By acquiring iLike, MySpace could be ripping the carpet out from under Facebook.

"[At] first blush the deal is particularly interesting for two reasons," Arrington writes. "First, simply because iLike is so deeply integrated into the Facebook experience. Nearly 10 million Facebook users use the iLike application every month. And iLike has also been a key part of Facebook’s ongoing struggles with what-to-do-about-music. MySpace is now going to own this."

A deal would also bolster MySpace status as go-to music site. In recent months, even as users have flocked to Facebook and Twitter, musicians and fans have used MySpace to stay connected. Artists post their tour schedules on MySpace; listeners log on to band pages to stream new music.

"While MySpace has regularly been a home for artists, it has rarely had an easy way to share music or to offer features besides playing music; iLike would bring better ways of sharing music between users, finding artists on tour and buying concert tickets," notes Electronista.

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