Confirming previous speculation, MySpace has announced it has acquired social music recommendation service iLike. The exact financial details of the deal weren't disclosed but MySpace is believed to have paid around $20 million, a sharp drop from previous valuations, which put iLike above $50 million. All employees will now work for MySpace but iLike will remain a separate unit based in Seattle.

“MySpace’s strengths have been a long-time source of inspiration for iLike,” Hadi Partovi, cofounder and president of iLike, said. “Combining MySpace’s existing platform, reach and resources with iLike’s syndication network and social discovery tools creates the potential for truly exciting innovation and commerce across any vertical entertainment category – our combined assets now span all the major social networks. I'm enthusiastic about what this combination will mean for our users, artists, advertisers, and our staff. We are beginning an exciting new journey together.”

iLike offers social music discovery and recommendations, similar to Last.fm, based on what the users' and their friends listen to or rate higher. The site lets users preview songs, listening to a 30-second audio clip, and has recently launched its own music store. However, its biggest assets are the music apps it has deployed on most major social networks having a particularly strong tie with Facebook where it is the most popular music app. The service was founded in 2006 and now has 55 million monthly users, a large part of those coming from Facebook. The site has struggled to become financially viable and has been profitable for the past eight months.

MySpace's acquisition though was less about the large user base and more about the team and the technology. The social network bought iLike through MySpace itself not through its joint venture with the big four music labels, MySpace Music, and it is downplaying iLike's own music assets. This makes sense as it has a much better offering with MySpace Music, which licenses the tracks in their entirety. In fact, Owen Van Natta, MySpace's CEO, believes that iLike's technology could go beyond just music and could recommend videos or games as well.

“The iLike acquisition advances our relentless pursuit of innovation and the need to create new distributed social experiences in music and beyond,” Van Natta said. “We are deeply committed to bringing world class talent into all areas of the company and this acquisition demonstrates our focus on this objective.”