MySpace Close To Acquiring iMeem

MySpace is in late stage negotiations to acquire music streaming service iMeem, we’ve confirmed from multiple sources. MySpace is on a bit of an acquisition spree – they acquired iLike, another music service, three months ago.

The iMeem acquisition isn’t yet finalized, we’ve heard from sources, and awaits approval from various stakeholders.

We don’t know the price of the acquisition, but this isn’t going to be a big win for investors. iMeem has raised at least $25 million (that we’ve been able to track) plus at least another $10 million in debt. But the difficultly in making a free streaming music service work as a business model forced them to make some hard decisions. Earlier this year they renegotiated label contracts and recapitalized the company, bringing in $6 million in fresh capital.

iMeem found a way to survive a few more months. But now they’re under the financial gun again, we’ve heard, and investors aren’t willing to put more capital into the company. But MySpace is stepping in to acquire the company.

What’s in it for MySpace – the acquisition of a seasoned team with lots of experience in music. Plus the iMeem and SNOCAP intellectual property. It’s not clear if the iMeem brand will live on, but iMeem users will certainly be welcome at MySpace, I’m sure.

This is another blow for free streaming music lovers. iMeem and MySpace Music were among the last free streaming services in the U.S. And MySpace Music, we’ve heard, will soon be forced to turn to subscriptions to manage costs.

iMeem was founded six years ago by then 23 year old Dalton Caldwell The first product was social networking via a client application that included file sharing, status messages, etc. It morphed into a music streaming service over time. According to Comscore, iMeem had 16 million unique visitors worldwide in September.