Is MySpace buying music service iLike? There’s been no official announcement, just seemingly well-sourced reports on TechCrunch and the Wall Street Journal, along with a follow-up on All Things Digital saying the deal has been delayed by tax issues.Assuming this is all true and the deal goes ahead, much attention will focus on whether it’s a comedown for iLike, which was once valued far higher, around the $50 million mark. It’s also already fuelling the debate on whether online music companies deliver a poor return on investment.However, we think it’s as important to focus on the implications this deal will have for MySpace, as well as what it means for iLike as it currently stands.One benefit for MySpace may well be on the mobile applications side of things. iLike has been active on iPhone recently, both with its own apps – Local Concerts and iLike Challenge – and with more than 250 other apps launched for artists, who can keep them updated by using iLike’s platform. The artist apps in particular would fit right into MySpace’s featureset, as it battles to keep artists from defecting to Facebook.Much of iLike’s growth has been fuelled by its hugely successful Facebook application, in fact. It’s unclear what would happen to this if MySpace becomes the parent company – but it’s easy to see how the technology could be integrated more tightly with MySpace profiles – and indeed with users’ playlists on MySpace Music.iLike’s launch this week of a music download store seems like a red herring in the context of any MySpace acquisition – as things stand, Amazon is powering music downloads for MySpace Music, and there seems little reason to change that in the short term.But here’s the thing: this deal seems more about iLike’s talent and technology than about its actual services. For $20 million, MySpace would be picking up a team that’s already developed some innovative social music services, and has the capability to build on that technology base and experience within MySpace.In other words, it would be less about crunching iLike’s services into MySpace now, and more about how iLike’s team can contribute to a MySpace relaunch sometime next year.Which in turn makes us wonder whether MySpace plans to put music at the centre of its battle to regain the initiative against Facebook. Doing so with the team that created the most popular Facebook music app is an added competitive advantage, of course.If MySpace is to get a resurgence in the next year, it’s likely to come from slick, innovative technology that helps people connect around the music they love. If the iLike team are able to contribute, $20 million seems like something of a bargain.
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