VentureBeat

Two announcements this week show how some of those silly MySpace widgets and annoying Facebook applications are becoming real businesses.

First, the rock band R.E.M. is going to release its latest album Accelerate through iLike, streaming the entire album across iLike’s Facebook, Hi5 and Bebo applications and its other services. It is the first time that a band this large has released an album through iLike.

Second, widget service provider Gydget has struck a deal with indie music marketer and distributor The Orchard, to distribute music through widgets on MySpace and other social networks.

R.E.M. is working with iLike because the Seattle-based company has sewn together its many properties into a service for musicians that it calls a “universal artist dashboard” (our coverage). This dashboard is proving useful for major acts, like R.E.M., because they can publish a new album, a demo song clip, a video, a concert schedule or other information on social sites and music services across the web.

Here’s how: ILike quickly became the dominant music-related service on Facebook, after the social network’s developer platform launched last May (our coverage). Its applications let you play a music quiz game, put clips of your favorite songs on your profile page, and see when your favorite bands are playing near you. More recently, it has expanded to rival social networks with developer platforms, Bebo and Hi5 (our coverage). It also offers desktop plugins for iTunes and Windows Media Player (here), as well as its free-standing site and an iPhone application. Applications for Orkut and MySpace are slated to launch soon.

The dashboard is now used by more than 200,000 musicians, and around half of the top 500 musical acts in the country, including Radiohead, Jewel, Linkin Park, and others, the company claims. Its dashboard reaches 23 million users, total.

U2, for example, published an original song through the dashboard earlier this year, and gained 300,000 new fans — and 10,000 new fan comments — within a week.

R.E.M. has a slightly more complex plan in store for iLike. Essentially, it is streaming its album across iLike properties, but not letting users download it. The band start streaming the album on March 24, a week before the album itself goes on sale in North America. ILike is letting fans pre-order it on iTunes and Amazon’s music store. R.E.M. will also broadcast an exclusive video message about the album, that it will distribute via iLike.

Note: In case you’re wondering how Facebook’s own music efforts (our coverage) might compete with iLike, iLike’s chief executive Ali Partovi tells me that he’s not staying awake thinking about it. He points out the Facebook chief executive Mark Zuckerberg repeatedly went out of his way at the South by Southwest conference to mention iLike and how it’s doing a great job. Also, Facebook’s own fan page for R.E.M.has nearly 2,000 users, while iLike’s R.E.M. page has more than 300,000.

Another note: In case you’re wondering how iLike might work with MySpace, which itself got its start through being a social network for musicians and their fans, Partovi says that the relationship will be symbiotic. The company is experimenting with linking musician’s fan pages on other applications to their MySpace pages, as opposed to creating iLike fan pages within MySpace and linking to those. ILike will also release applications on MySpace, such as its music quiz application. But Partovi concedes that MySpace is a more competitive environment overall than the other social networks, with a range of third parties already running music-related applications, such as Imeem and its MySpace playlist widget.

So where’s the business angle in all of this? ILike is already among the top five traffic sources for iTunes. It is also one of the top five sources of ticket sales for concert ticket-selling service TicketMaster, one of iLike’s investors.

Meanwhile, widget company Gydget (previously event service Attendio; our coverage) has been working on its widget distribution service. The site lets anyone create a simple widget that they easily put their social networking information inside of. For example, for bands on MySpace, Gydget’s widget lets them enter their user ID or profile URL, then it imports their images, events, MySpace blog and YouTube videos. After a band creates the widget, it can easily update the widget with new information, such as tour dates.

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We recently covered widget-maker Gydget, when it switched over to the widget business from its previous incarnation as events site Attendio.

At the time, we mentioned that the company was seeking a fresh infusion of capital from its investors. It has now received the round, from investor SunBridge Partners, although it isn’t disclosing how much.

Gydget is a good example of a company that seems to have found a viable business plan in the course of an unsuccessful first try. Attendio never gained much traction, but the company tells us that its Gydget widgets are in active use.

Some new celebrities using the widgets include Henry Rollins, Paul Oakenfold and Unkle, as well as the whole artist catalog of Curb Records. Two larger labels, EMI and Universal Records, are also preparing to roll out the widgets, according to the company.

Gydget’s main competition is probably SplashCast, which has Columbia Records on board (see our previous coverage). However, the true risk for widget companies is always the Next Big Thing.

Most deals with record companies are non-exclusive, meaning artists can drop out at any time in favor of using a new, slicker technology.

updated
After being a portal for events for less than half a year, Attendio has abandoned the the events industry, saying that market is too small. It has decided instead to become a widget-making company, jumping from one crowded industry to another.

It’s just the latest indication that the Web 2.0 market is bubbly, and raises questions about why VCs keep investing in the sector. The San Francisco company raised (see coverage) less than $1 million in funding from Sunbridge Partners earlier this year.

Renamed Gydget, the company’s widgets will link out to online articles, pictures, videos, and mobile-connected services. Users include several dozen celebrities and sports teams, like Beyonce and the Bengals.

Gerardo Capiel, the company’s CEO and founder, looks to be leaping from the frying pan to the fire. Even when Attendio launched, the events market was crowded: Other sites include Eventful, Zvents, Going and Yahoo Events (which acquired Upcoming).

Similarly, the widget-making boom has already arrived. Dapper, Widgetbox and Splashcast all offer some variation on the build-your-own widget theme. Capiel says Gydget’s offering is superior, as its widgets are capable of offering any type of content, while other companies focus on a niche like video or news.

Gydget’s advantage may be in simply having seen what works. Most traffic to Attendio already came from existing Gydgets like the game schedule widget used by the Oakland Raiders football team. By closing down Attendio and focusing only on widgets, the site may be able to capture a more significant audience.

However, it’s difficult to assess whether there’s a widget opportunity. Capiel declined to share traffic numbers. Widgets are fast becoming a commodity, offered widely around the internet. Pageviews also may not be as important a metric for the new business, as much of its revenue may come through affiliate sales of tickets for bands and teams.

Attendio first emerged during DEMO earlier this year. The company is in the process of raising another round.