LONDON/NEW YORK – CBS Corp. (CBS) said Wednesday it bought Last.fm, the online music service that allows fans with similar tastes to connect, for $280 million in a bid to attract young audiences.
The London-based service has more than 15 million active users in over 200 countries, CBS said, and has earned praise for a system that recommends songs by tracking users' music-playing habits and linking them to other fans with similar tastes.
Within a year, CBS aims to apply Last.fm's technology to build new communities for online videos that will include its own archive of hit shows, CBS digital chief Quincy Smith said in a phone interview.
He compared the deal to News Corp.'s (NWS) acquisition of the popular MySpace online teen hangout, which set off a series of Internet acquisitions by traditional media companies.
"We're emulating what Fox did with MySpace," Smith said. "There are a lot of super-cool, whiz-bang applications they have that I can't wait to apply to other parts of the business."
Like Last.fm, MySpace was started with a keen focus on music, but has been broadened by new owners to apply to videos and lifestyle.
The deal is part of CBS' broader plan to expand its audience and improve its connections with viewers through the creation in April of the CBS Interactive Audience Network, a broad Internet distribution network for its shows.
CBS, which has been known for its aging television audiences, has been trying to lure the highly coveted young adult viewers.
Indeed, there had been market speculation that CBS' former corporate sibling, Viacom Inc., which owns the MTV Networks and Paramount movie studios, had been a likely bidder. Viacom declined comment.
CBS, which owns one of the highest-rated U.S. television networks and operates 144 radio stations, has also purchased Wallstrip, a financial news blog.
The Last.fm team will continue to run the online network and work with CBS to extend CBS businesses online.
The group recently signed deals with major record companies Warner Music Group Corp. and EMI Group Plc to play their music.
Last.fm, which launched in 2002, has its largest concentration of users in the United States, Britain, Germany, Poland, Brazil and Japan.
"Their demographics play perfectly to CBS's goal to attract younger viewers and listeners across our businesses," CBS Chief Executive Leslie Moonves said in a statement.
CBS shares fell 26 cents to $33.03 on the New York Stock Exchange.
One London-based music industry analyst said the deal made sense, but questioned whether Last.fm's phenomenal growth could be sustained in different types of media.
"Last.fm has built a social networking service around music," said Tim Grimsditch, director of strategy at music industry consulting firm Frukt. "The question is whether that same logic applies to moving images, movies and TV."