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August 18, 2009

Why iLike Sold for Peanuts...

Business Insider | Read Full Story >

Another aberration was around CBS’s purchase of Last.FM for $280M. Last.FM had lots of users using its free service (something like 15M). But supporting those users was expensive (bandwidth, music rights) and the users weren’t paying. CBS viewed it at the time as a play for audience, and that makes sense. But at that price, a more successful ad model would need to emerge to overcome the content and bandwidth costs. As soon as the ad market hiccuped, that price looked exorbitant and indeed now traffic has declined and its business model unproven.



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