MySpace to Acquire Music Streaming Service iMeem

The online music space is in a volatile state with newcomers popping up seemingly every week while older services are dwindling, having failed to reach the popularity they needed to survive. But, while they may not be thriving financially, the online music market is sure to explode in the coming years and already some players are consolidating their position. MySpace has given up on the social media front and wants to become an entertainment hub, with music being a huge component. The company is now said to be in talks to acquire music streaming startup iMeem with a deal awaiting approval according to multiple sources.

There aren't too many details on the deal but it looks like investors don't really have anything to be overjoyed about as MySpace is the last option for the struggling company. The company has been bleeding money and failed to develop a sustainable business model based on free music streaming and investor money and patience are running thin.

iMeem has raised a significant amount of capital, some $25 million since being founded in 2005 but hasn't managed to turn this into a viable business. The company also has about $10 million in debt. The money it raised so far is mostly gone and without additional funding the firm is forced to look to outside help. Bad news for iMeem and its investors, but good news for MySpace which gets its hands on another talented team and a good chunk of users on the cheap.

The social network acquired music service iLike a few months back for what amounted to small change, about $20 million. The move proved brilliant after iLike later managed to score a deal with Google, which had been in the works since before the MySpace acquisition, apparently, to power the search giant's new music offering. And with MySpace betting hard on the content and media segment, it's now rounding up quite an interesting group of people working on its music services. If it can focus their talents and work out a product that is a hit with the users and manages to somehow please the music labels, it may be seeing brighter days.