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Today, technological advances have made it easier than ever to create music and sell it, or give it away for free. But the big problem for aspiring musicians in this new world is finding fans who will pay for things like concerts, t-shirts, CDs, digital track or anything else. Meanwhile, the problem for fans is finding new music that they’ll actually like, and maybe want to somehow pay for.

ILike is an emerging leader in this competitive but still relatively young marketplace of “music discovery” services that help musicians build fan bases. We’ve been tracking the Seattle, Wash. company for years, and at this point it appears to have become a significant component of how music will be shared in the future. Both new and existing acts are using it to help advertise album releases, and iLike is starting to have a big impact.

The company, which has gained more than 25 million total registered users, bridges two industries of questionable value — music and social networking. And get ready for this: It has a couple interesting revenue streams coming in. More on that in a second.

A key component of iLike is its social network applications on Facebook and other sites, that let you become “fans” of musicians and do things like see when a band you’re a fan of is playing nearby. Artists can also stream songs or entire albums live within their pages on social networks. A musician can send out a single update about a concert, a new track or whatever, and iLike will distribute that message across all of iLike’s properties.

Nineties’ rock band R.E.M., for example, launched a comeback album and tour last month starting with a live stream of its new album and promotional page on iLike’s app, and — and this is at least an interesting correlation — the album spent a week at number one on the two largest music sellers on the web, iTunes and Amazon’s music site earlier this month, and had sold-out concerts.

However, R.E.M. is a known act so maybe this and the quality of the music were what drove people to like it? Here’s another example of iLike at work. Earlier this month, it played an interesting part in helping an album release up-and-coming band called Lady Antebellum become the first country act to crack the iTunes top albums list, reaching number three at one point.

The album has also become a mainstream success, performing in the recent CMT country music awards ceremony, and becoming the first new act to debut at #1 in Billboard’s list of top country hits since the list itself was created in 1964. It sold more than 43,300 units in its first week of sales. And, while country hits normally only generate 4.5 percent of sales from digital music, Lady Antebellum’s latest album’s sales were more than 21 percent digital — which suggests that digital marketing of various forms, such as iLike’s applications, led people to buy digitally.

Aside: The band’s strange name comes from the house where it used to rehearse. It’s not a Gone With The Wind reference, I guess.

So where does iLike fit in?

Lady Antebellum has nearly 10,000 fans on its iLike page (see screenshot), which includes fans on its Facebook application and other social networks. It is an increasingly large component of marketing music online — where MySpace still reigns. The band was formed because its members met each other in 2006 on MySpace, and began posting tracks there — now it has 28,270 friends on its MySpace site profile (warning: If you go to that page, you’ll be assaulted by a song and a music video — with ads — all at once). Meanwhile, Lady Antebellum has only been using iLike for the last eight months, meaning that’s its popularity there has had less time to grow, and its been doing so in properties that aren’t as immediately recognized as places for musicians and their fans.

Also, Lady Antebellum had promotion efforts like interviews with radio stations and paid ads that it ran for its album. There are lots confounding variables when it comes to determining what makes music successful, besides just being good.
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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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1. Facebook sees monthly dip in UK traffic, not a big deal
2. Abengoa Solar wins solar electricity plant contract with Arizona government
3. NAND flash memory chips getting cheaper
4. Facebook developer Blake Commagere has top Facebook games
5. ILike, the social networking music application, now has 22 million users
6. Windows Live SkyDrive offers up to 5GB free storage
7. Ta-da, the magical wireless mystery tour: SF bus begins testing internet service
8. “A truly great idea: 99 cent rotating movie rentals on iTunes”

Facebook sees monthly dip in UK traffic, not a big deal – Facebook had only 8.5 millions United Kingdom users in January, a drop of 400,000 monthly active UK users from December, a Nielson reports says. The Register crudely seizes on the news to suggest that the seasonal traffic dip is “very bad news for Facebook” — prompting a chorus of trollish comments (pictured). However, monthly fluctuations in social networking traffic are the norm. In fact, people were questioning the growth potential of Facebook back in 2006 due to drooping February, 2006 comScore stats (our coverage). That was before the site more than doubled in size. Another likely explanation for slowing Facebook growth statistics in the UK — and the US — is simply that most potential Facebook users in these countries have already joined (which we’ve mentioned, here).

Abengoa Solar wins solar electricity plant contract with Arizona government — The publicly-traded Spanish company, which already has plants in Spain, Morocco and Algeria, will build, own and operate a 280MW solar plant located near sunny Gila Bend, Arizona. The client, the Arizona Public Service Co., will pay $4 billion over the next 30 years. Operations will begin in 2011. Meanwhile, most US solar projects are still generating power in the 5-10MW range. From Clean Edge:

The Solana Generating Station will have a total capacity of 280 megawatts, enough to power 70,000 homes while avoiding over 400,000 tons of greenhouse gases that would otherwise contribute to global warming and climate change. The plant will employ a proprietary Concentrating Solar Power (CSP) trough technology developed by Abengoa Solar, and will cover a surface of around 1,900 acres.

NAND flash memory chips getting cheaper — Consumers might buy fewer new phones and other devices that contain NAND flash chips to save money during a recession. Demand will drop and the market will get oversupplied. Chips will get cheaper, and annual revenue from chip manufacturers will climb from seven to nine percent, research firm iSuppli says, a sharp drop from its earlier projections of a 27 percent increase. PC World takes a look at the numbers.

Facebook developer Blake Commagere, has the most top games on Facebook — So says this table crunched by Bret Terrill, of social game development company Tenuki, below. Here’s our interview with Commagere from last fall, about Open Social.

(Via Jeremy Liew)

ILike, the social networking music application, now has 22 million users — ILike offers a range of Facebook applications, an iTunes toolbar, and a free-standing web site for musicians and their friends. Its main Facebook application has grown from 4.5 million total users last July to 14 million today. The other chunk of half of its total 22 million users are coming from iLike.com and social networks besides Facebook. Techcrunch has more.

Windows Live SkyDrive offers up to 5GB free storage — That’s equal to AOL’s Xdrive. Details here.

Ta-da, the magical wireless mystery tour: SF bus begins testing internet service — All you’ll see on the outside of this hybrid electric bus is black and green paint, with a picture of Mother Earth and an electronic display featuring environmentally friendly messages. Here’s what you’ll find inside, according to the Chronicle:

A big, black steel cabinet behind the driver’s seat is stuffed with gadgetry that allows laptop-toting riders to connect to the Internet. The onboard electronics also provide the wall-mounted touch screens with information on the bus’ route and location, connecting routes and live information on arrival times. It also collects information about the bus and its operation that will help Muni maintain, schedule and run buses more efficiently.

The bus, part of the San Francisco MUNI mass transit system, will start service on Monday and continue for the next year, running on the 10-Townsend line.

“A truly great idea: 99 cent rotating movie rentals on iTunes” — VentureBeat’s MG Siegler takes a look, on his personal blog, Parislemon.com.

OpenSocial, the Google-led platform to allow applications to be built across social networks, has been criticized as slow moving.

However, progress is being made. Today, social music services iLike and QLoud introduced the first OpenSocial applications for the popular social network Hi5.

ILike’s Hi5 application lets you post songs and videos to your Hi5 profile. This is similar to iLike’s popular Facebook application.

ILike’s strategy is to build social music applications across social networks — Facebook, Hi5, and the rest — then let musicians communicate with their fans across all of these networks (our coverage). OpenSocial is designed to allow applications to work on multiple social networks without extra development effort. To iLike, Hi5 is an untapped market and OpenSocial is the tap.

The Seattle, Wash.-based iLike has also recently introduced applications designed for musicians on Facebook, to let them upload their discographies and communicate with their fans. Note: Facebook, as we’ve written, has itself been working on what appear to be competing music applications.

Hi5 had previously promised to host third-party applications within the next year, so this is quick work, as Nick O’Neill points out.

Still, iLike is the largest company experimenting with music and these social networking applications. It has nearly half a million daily active users on Facebook.

Qloud, meanwhile, is one of the others. Its Hi5 application lets you listen to and share your iTunes libraries from within Hi5, or Facebook or Friendster. It is a smaller and less polished application than iLike. The biggest problem with the application is its iTunes sidebar, where you add music from iTunes that will appear within these networks. This sidebar is slow and has made iTunes less responsive on this reporter’s computer.

These applications are the first snowflakes of a blizzard. There will no doubt be many announcements about OpenSocial applications. Thousands of Facebook applications launched since May will be trying to find a home on OpenSocial. We won’t cover many of them, because most will have poor design or undifferentiated features. In aggregate, however, these applications are the start of something bigger — potentially.

If you believe the executives at iLike and other application developers, these social networks are the future of digital media, the main places where people communicate, share music, play games and maybe even get some work done in the coming years.

ILike, a music discovery service, has launched a news feed that connects people and their music libraries with their favorite musicians across its web applications and desktop music players.

It has also expanded its offerings to help musicians reach fans on all of its services. ILike is targeting Myspace’s large network of musicians and fans, and is betting its news feed will prove a better way to reach music lovers.

This news comes as Facebook has begun launching its own music service, complete with specialized applications for musicians on Facebook.

The news feed shows a regularly updated list of your favorite artists’ new tunes and videos, their concert dates in your area, information on where you can buy tickets (Ticketmaster is an iLike investor), news articles and other information that keeps you connected to what they’re up to. The news feed shows a regularly updated list of your favorite artists’ new tunes and videos, their concert dates in your area, information on where you can buy tickets (Ticketmaster is an iLike investor), news articles and other information that keeps you connected to what they’re up to.

ILike is differentiating itself by connecting its many different properties. Its feed appears in its iTunes toolbar (and soon Windows Media Player) toolbars, in its Facebook application and will soon expand into social networks such as Bebo, Orkut and other sites that have joined Google’s OpenSocial developer platform.

A study by the company in September showed many popular bands had more iLike fans on Facebook than had friends on Myspace. ILike now has 709,437 daily active users on Facebook, seven percent of its over ten million total users, and now it claims that over 45 percent of artists can reach more fans on iLike than they can reach on Myspace.

Since May, iLike’s main application has offered musician profiles for over half a million artists. It lets you you to add clips from your favorite songs to your profile, play a music trivia game, and designate yourself a “fan” of musicians.

iLike has now pre-created 160,000 new advertising “Pages,” using the features that Facebook is launching today for brand advertisers, that include all of a musicians “fans” and other iLike information. These pages will also come pre-loaded with iLike’s musician applications, such as Concerts for posting about upcoming shows, Songs for putting full-length songs or clips on musicians’ pages, and iCast so musicians can send multimedia messages from a computer or phone to fans.

ILike is also offering a “Universal Artist Dashboard,” a place where musicians can control what information they send out in feeds. As iLike integrates with OpenSocial social networks like Bebo and Orkut, this dashboard’s reach will widen.
It uses information from users preferences on Facebook, iTunes and WMP and soon its OpenSocial social network partners to learn about which bands and songs fans like the most. Its toolbar not only recommends songs and other fans to you, it sees which songs you listen to the most — any song you listen to more than ten times gets counted as an iLike favorite.

ILike’s toolbars and applications already shows recommendations for related songs and users with similar tastes, but now it will show you a reverse-chronological feed of information about your favorite bands in your iLike feed — like Facebook’s news feed, but for information about music.

This is a big step up in what you can get out of the service. There’s already some cross-functionality between the sites. You can import your iTunes playlists to listen to within its Facebook application, for example. Ali Partovi, the company’s chief executive, sketched out main points of this plan when we interviewed him in late May.

The large music sites — Last.fm, Pandora, imeem and others — are taking the role of record labels by serving as the advertisers and distributors for musicians. ILike could break new ground in this market with its unique approach of stitching together a users’ listening habits and stated preferences on social networks.

Here’s a Friday afternoon roundup of the latest action:

1) Geezeo connects you to personal and financial online services
2) Online advertising worth almost $10 billion in the first half of ‘07
3) Rumor: Facebook has iTunes competitor in the works
4) DocStoc private beta invites

Geezeo, an online financial management service, now connected to even more financial institutions – We’ve recently covered Mint, a personal finance site that lets you aggregate your online bank accounts, then analyze things like your overall spending patterns. We’ve also recently covered Cake Financial, which lets you aggregate your stock portfolio from across brokerage firms then compare your performance against other users.

We haven’t covered Geezeo, most directly a competitor to Mint and others, such as Wesabe and Buxfer. Framingham, Mass.-based Geezeo has already let you aggregate and analyze accounts for your credit cards, checkings and savings, loans and other accounts. The company has most recently let you add accounts from over 2,000 brokerage firms, mutual funds and insurance companies, making it possibly the most comprehensive online tool for tracking your personal finances.

Online advertising revenue worth almost $10 billion in first half 2007 – While many wonder if a recession will hit in the next year, and how online businesses may be affected, the good times of the past few years are still showing up on web companies’ financials.

A report by The Interactive Advertising Bureau and PricewaterhouseCoopers shows online ad revenues set another record in the first half of this year, nearing a total of $10 billion. In Q2, these revenues exceeded $5.1 billion for the first time in a single quarter, a 25.4 percent increase over Q2 2006. The blog WatchMojo calculates that Google alone may be make up 40 percent of this money.

Rumor: Facebook has iTunes competitor in the works – The rumor-monger, the blog AllFacebook, says it has a high-placed, extremely reliable source that says Facebook is hiring people for the effort, and trying to cut distribution deals with record labels. If this is true — and this is a big “if” — the service would throw Facebook into competition against Apple, Amazon and other companies offering online music purchase services.

At first glance, Facebook may also appear to be threatening third-party music applications on Facebook, such as iLike. ILike, far and away the most popular music application on Facebook, is trying to spoil Myspace’s status as a leading online music fan site. It has just released more tools to help artists connect with fans. Last month, the company told us it has more people identifying themselves as fans of bands on iLike’s applications than on Myspace (our coverage). ILike currently directs users to iTunes and Amazon for music purchases.

A Facebook “FaceTunes” (our word, not theirs; our other idea is “TuneBooks”) music service may be compatible with iLike’s challenge of Myspace, where iLike would help funnel music purchasers from its applications to “FaceTunes.” ILike has been careful to develop social services around music rather than developing its own music purchasing service.

Facebook, notably, has taken a dim view of applications that let people share actual music files. One application that did that was Audio, which was subsequently taken offline by Facebook for not following Facebook’s terms of service concerning the sharing of copyrighted music (our coverage).

DocStoc private beta invites – The company (our coverage), which lets users upload and read documents on the web, is offering VentureBeat readers free invites. While other sites, such as Scribd, already offer such a service, DocStoc is focusing on legal, business and educational documents. Adobe’ Share and Microsoft’s Windows Live Workspace are also trying to make it easier for people to upload and share documents. Docstoc chief executive Jason Nazar prepared a video for VentureBeat readers in the video below (RSS readers will have to go to site).

ILike, by far the most popular music application on Facebook, has started overtaking MySpace in sheer number of fans registered for some top music artists.

The young Seattle company is being coy on specifics, but consider this: Artists like Nickelback, Modest Mouse and Kayne West now have many more fans/friends on iLike than they do on the giant network MySpace. Name an artist, and there’s almost a 50-50 chance they’ll be more popular on iLike.

While iLike is nowhere near as popular as MySpace in traffic, the surge is significant because it shows how quickly Facebook’s platform — with its viral force among 40 million, mostly young people — can propel forward a young company like iLike. After all, iLike’s Facebook application only launched in May.

ILike currently has nearly eight million total users on Facebook, around ten percent of whom use the application daily.

VentureBeat randomly selected eleven musicians that have led the charts recently or are otherwise popular, noted their Myspace numbers, and got then requested the comparable data from iLike’s fan numbers. See below for a comparison chart, which iLike put together for us. You’ll see that in 5 of the 11 cases, iLike has more fans.

Many of these artists have had extensive Myspace-branded promotions within Myspace and on TV, in part aided by Myspace’s parent media conglomerate, News Corp; artists’ profiles on ILike’s Facebook site have not had the same benefits, Partovi notes.

Admittedly, this is a small data sample. However the types of artists that are more popular on iLike, versus MySpace, appear to align with what social researcher Danah Boyd wrote in a controversial essay from late June about socio-economic differences between Facebook and Myspace users. First, here’s what Boyd said:

The goodie two shoes, jocks, athletes, or other “good” kids are now going to Facebook. These kids tend to come from families who emphasize education and going to college… They are primarily white, but not exclusively. They are in honors classes..

MySpace is still home for Latino/Hispanic teens, immigrant teens, “burnouts,” “alternative kids,” “art fags,” punks, emos, goths, gangstas, queer kids, and other kids who didn’t play into the dominant high school popularity paradigm. These are kids whose parents didn’t go to college, who are expected to get a job when they finish high school. These are the teens who plan to go into the military immediately after schools. Teens who are really into music or in a band are also on MySpace. MySpace has most of the kids who are socially ostracized at school because they are geeks, freaks, or queers.

The mainstream rock bands on the list — Nickelback, Third Eye Blind, Matchbox Twenty and, for better or worse, Modest Mouse — tend to have fans that fit Boyd’s stereotype of Facebook users, and all have far more users on iLike.

Universally popular diva Beyonce is also equally popular between the two sites.

Hip hop stars Timbaland, Fergie, Rihanna are much bigger on Myspace. So is Colbie Caillat, the folkish singer who made it big through Myspace, and country singer Carrie Underwood.

Notably, though, rapper/producer Kanye West has a far larger following on Facebook; many critics and fans say his albums have become increasingly mainstream.

Gangster rapper Young Jeezy is the biggest anomaly, if Boyd’s stereotypes prove to fit overall — then again, mainstream rap mogul Jay-Z has signed Jeezy to his record label.

ILike, of course, would like to take every fan and musician from Myspace. By providing what for many Facebook users is their only music application, iLike is helping to make Facebook compete again Myspace music. At the same time, it is benefiting from Facebook’s overall growth versus Myspace.

“A month ago, if I told anybody we could unseat MySpace in music, they’d say I was crazy,” Partovi told us in May, only a few days after launching iLike’s Facebook application. “Today, it seems not only possible, but actually like it’s on track to happen unless we screw it up,” he said then. ILike has been the most popular music application on Facebook since it launched in late May.

Ilike’s closest competitor on Facebook, an application called Audio that let users upload and share entire tracks of songs, was removed by Facebook in July. Facebook said Audio was violating its terms of service, specifically, the parts of it concerning copyrighted materials. Audio keeps promising us that it will return, but has yet to relaunch.

Ilike’s user base is essentially a big address book of fans, complete with each users’ musical preferences, that musicians can tap into to promote concerts, album releases, and anything else.

Its Facebook application lets you choose audio clips of songs and put them on your Facebook profile, as well as buy songs through iTunes or Amazon. It separately offers a game where you can compete against friends to see who can name the most artists or songs from hearing snippets of tracks.

It also shows which of your favorite musicians are on tour, the locations of their shows, and which friends are planning to go.

ILike has additional means to beat its competitors. The company itself actually began as a music “discovery” service that used a downloadable plugin for iTunes to give you recommendations for songs you might like, based on what other users with similar tastes were also listening to. It still offers this service, and the company tells us it plans to integrate it with the Facebook application soon.

ILike also owns GarageBand.com, a site that features independent musicians.

Ticketmaster is an iLike investor, and provides iLike users information with about events where their favorite bands are playing, and then tries to sell them tickets.

Updated

CBS has bought music recommendation website Last.fm for $280 million, the extremely popular London-based company that lets users search for and listen to music based on their past preferences and recommendations of other users.

Last.fm says it has around 20 million active users each month, four million of which are in the US. The purchase comes at a time when services such as Last.fm are growing extremely quickly. Other private competitors showing growth are Pandora and iLike. The deal is significant because it gives Last.fm greater distribution, by integrating with other CBS channels.

The CBS deal is a win for London’s Index Ventures, which has been on a roll with investments in companies such as Skype and Tellme. Index invested a mere $5 million into Last.fm exactly a year ago. The deal nudges Index’s Danny Rimer, who is on Last.fm’s board, closer to the top of the VC pack, in terms of track-record — and most certainly seals his place at the top of those under 40.

CBS has been on a rampage lately, striking deals and partnerships with more than a dozen Web 2.0 companies to seek distribution through new Web channels in order to access younger viewers, including buying video site Wallstrip last week.

Viacom was earlier rumored to be in talks with Last.fm. (update: Investor Neil Rimer tells us this rumor was a load of crock.)

Last.fm focuses on user preferences, sorting music based on user feedback, whereas Pandora recommends music based on song characteristics that are similar to ones you have previously chosen. iLike is more similar to Last.fm, and is showing tremendous growth on Facebook’s platform, heading toward 1 million new users within the first week of integrating with that service — though works only with iTunes recommendations. Last.fm also submits recommendations from music from other players, including on your desktop. There are more than 500 monthly track submissions on Last.fm.

Under the accord, Last.fm co-founders Martin Stiksel, Felix Miller and Richard Jones will remain in east London.

Last.fm, just four years old, has struck deals with with EMI and Warner Music.

Pandora, meanwhile, has raised more than $20 million from Crosslink Capital, Labrador Venture Partners, Selby Venture Partners and WaldenVC. iLike has raised $13.5 million from IAC’s Ticketmaster five months ago, giving Ticketmaster 25 percent of the company — a deal that may make Ticketmaster look pretty smart based on Last.fm’s $280 million valuation.

The deal will only add to the frenzy we’re seeing in M&A right now. In addition to iLike and Pandora, Santa Clara, Calif.’s Mercora, another music discovery site, is also in play.

Update: We just talked with Index’s Neil Rimer (Danny’s brother), who said Last.fm will be in an even better position to serve music, because of CBS’ range of partnerships.

A few days after social network site Facebook opened its platform to third-party sites, iLike, a popular music sharing site has scored 723,936 users on Facebook. It is by far the most popular application. We interviewed iLike chief executive, Ali Partovi. He compares Facebook’s platform to the web itself.

VB: Tell me about your experiences with Platform so far. You’ve been working on putting iLike on Facebook for several months now. Yet on the integration since Friday morning, there have been bugs and other issues on iLike’s end. What’s the status? Do you have enough servers now?

AP: So, first to give you the back-story on how we got involved: Over the past several months, we’ve pushed and pushed with Facebook asking for some sort of exclusive relationship.

They repeatedly said they won’t do an exclusive relationship, but would rather create a level playing field where we could compete with other third parties. We then gave up a bit, and we were actually a bit late to the game learning about the platform in detail. But when we finally did get access, our President, Hadi Partovi (my twin brother) took very little time to decide this was a huge strategic priority. That was a month ago.

We re-prioritized everything else, and started moving our people off other projects onto this. First two or three people, then a few more, and by the end it was a huge group of engineers pulling back-to-back all-nighters for a week-long sprint to the launch.

VB: What made iLike think that Facebook Platform would be a big deal? What stood out about it?

AP: Hadi has a strong background in the concept of platforms… at 24 he became the head of product management in the IE group at Microsoft, and was a key player in the browser wars. A month ago, even though the Facebook Platform wasn’t fully fleshed out, he saw just from the early beginnings of it that this could redefine web development.

What he said was, “in the history of computing, there was the personal computer, there was Windows, there was the web, and now the Facebook platform.” You can imagine that I and most our company was pretty skeptical. But he makes these calls so we followed him.

As to what stood out: it’s a combination of 3 things:

1) The technology itself — Facebook’s platform, like any platform, offers the developer building blocks to build apps faster than they could if they were starting from scratch, and to tap into a rich source of data & capabilities that would never otherwise be available.

2) The potential for viral spread — due to the way the Facebook news feed works, an app can spread across the community entirely by viral spread, as friends get notified when one person adopts it… this essentially bypasses the idea of trying to make your app “viral” as a standalone, because the Facebook is itself naturally viral.

3) The rhetoric from the Facebook management team, starting from the CEO himself, made it clear that they have a long-term commitment to a level playing field. For example, they absolutely refused to give us any special advantage, insisting that the market needs to see a level playing field… we offered them ownership in our company, money, etc — but they had no interest. Furthermore, they built and launched their own “video” app, but left it to “compete” on its own merits alongside other third-party apps rather than making it “pre-installed” for all Facebook users.

So, #1 and #2 made this something we had to jump on, and #3 made us comfortable with the long-term strategic implications.

VB: Some Facebook applications are still more viral than others… tell me why iLike is so popular?

AP: To be honest, we’re not completely sure! There is certainly some art and science to making an app viral, but also a healthy dose of black magic

But for one thing, iLike is quite different from almost all the other apps, in that it’s not simply a “widget” to add to your page, but an entire expansion of the Facebook feature set to add a rich music experience. For example, artist profiles — our app contains 500,000 and growing profiles for artists from major label acts to unsigned artists. It does include the ability to add songs to your pages, but also much more that you get on the app pages themselves — e.g. see upcoming concerts, who else in the community is going, etc.

VB: You’re able to incorporate information from Garageband, right? [Garageband.com is a companion site to iLike that features profiles of independent musicians.] From that, what sort of traffic are you seeing back to iLike.com and Garageband from the FB platform?

Thanks to Facebook, the moment a new user visits iLike [within Facebook], the very first page they see is automatically personalized to them already. Thanks to [the information on your profile at] Facebook, on your very first page view, we know your music tastes, your location, your list of friends, and their music tastes. So we can immediately tell you, “here’s one of your favorite artists with a concert near you, and these are your friends who might wanna go.”

We’re accomplishing the same thing on our own website (www.iLike.com), but you can imagine it’s much harder: first you have to tell us your music tastes, then invite all your friends, then they have to tell us their music tastes… Facebook solves the classic chicken-and-egg problem for a wide range of social applications like this because they already have all the chickens and eggs ready for you to use.

VB: How do you plan to monetize your Facebook user base, now that you have one?

AP: Rather than viewing our Facebook app as a way to get people to click through to our site, we view it as a self-contained site in itself, where we might even be able to build a bigger business than our own site. So, regarding monetization: We already make money from the links to buy music on iTunes or buy tickets on Ticketmaster. We also plan to place banner ads throughout the iLike app on Facebook.

The traffic on iLike.com was already quite substantial (well over a million registered users — I’m not going to disclose yet quite how many, but we’ll be making an announcement soon)… and to our astonishment the traffic on our 4-day-old Facebook app is already larger!

In terms of daily signups, iLike on Facebook trounces anything else we do… iLike on Facebook has been signing up roughly 200,000 new members a day — the only thing I can think of on the internet that’s growing faster than that is MySpace and maybe some of the free email/instant messaging services. And we haven’t even brought out the big guns to drive our growth (marketing to the existing iLike base, or paying for marketing on Facebook)

As for GarageBand, the number of MP3 streams and downloads has tripled almost overnight. It’s a very good time to be a GarageBand.com musician.

VB: As to the other question, about the Platform terms of service — based on what you’ve said already, you don’t see a risk of FB trying to develop its own music app that it favors, or charging iLike for its use of platform?

AP: It’s a mutually symbiotic relationship. This is just the very beginning of the race, and our only concern right now is to put distance between us and whoever #2 might be. But the longer term question is, what if Facebook themselves wanted to build their own? The answer is that we’ll be adding value in ways that will be hard for them to duplicate. Or rather, hard for them to duplicate simply by building some code.

There are two other hypothetical long-term worries:

1) Facebook starts taxing us. I think the way they are already taxing us is by keeping the prime ad real estate (top and left side), which they sell; maybe they’d consider increasing their pixels of ad space. but I highly doubt they’d actually demand revenue: they’re smart enough to know that the way to make money is to keep your slice of the pie small, and make the pie grow huge… rather than try to increase your slice of the pie and risk shrinking the pie.

2) Facebook technically can’t keep up with the demands of web app development… what if the FB Platform somehow breaks under its own weight, i.e. they can’t actually technically support all the apps? That is what has been happening a lot the last few days… that one is the only legit risk, but I think it’s a good horse to bet on!

VB: What do you plan to add that will let you keep that lead? Do you think that iLike/Garageband is already unique — hard for anyone to duplicate?

AP: For example, we’ll be collecting a lot more about people’s music tastes (right now we merely scan what they’ve typed into their profiles; soon we’ll hook up our iTunes applet that scans your entire music library to learn your tastes). We’re also letting people click, “I’m going,” or “I wanna go,” for any concert — this is building a giant database that makes our app more valuable, and anybody wanting to duplicate that would be starting from zero.

Imagine hypothetically, you’re wondering who to invite to the Arcade Fire concert. You can go to iLike, where millions of people are actively declaring which concerts they are going to, etc. Or you can go to the newly launched “official Facebook music” app that has just started and doesn’t have many users. Our service will actually be better than any challenger, because of the strength in numbers, because of the rich data we’re collecting.

VB: Have you had any communication with Facebook, especially their legal department, about iLike’s relationship with record labels? Or other licensing-type issues?

AP: iLike has never had a single copyright-related issue, we secure all the necessary permissions from the copyright holders in advance, whether that’s the labels or the teenage bands. What’s great is that Facebook has created a platform where you can be the winner without breaking the rules.

VB: So, if this is to be a long-term problem, it would assume near-infinite growth in the number of apps and in the number of people who use them?

AP: Well, we’ve already had some outages, mostly because we weren’t equipped to handle such instantaneous popularity, but in some cases due to issues on Facebook’s side. On day one, we added 10,000 users in the first ten hours. Then, mysteriously, we were shut down… we called Facebook and discovered that we had tripped an internal limit they had set for an app that receives 100,000 page views in a day. So they increased the limit to 1 million. We were shut down again 3 hours later because we had already tripped the 1 million limit.

Or, more seriously, today we experienced multiple very frustrating outages, which significantly curtailed our growth, and they were due to Facebook’s Platform having some issues… what’s worse is that the error page linked to our support email, which resulted in a ton of complaints to us.

I have sincere faith that if there’s anybody who can pull this off, it’s the Facebook guys — they are absolute professionals and unbelievably gifted engineers. Nobody had any idea how fast this would grow.

VB: What percentage of the problems you’ve experienced has been because of FB platform scaling issues as opposed to iLike scaling issues?

So far, 20% of iLike’s problems have been Facebook’s fault, and 80% our own fault (or that of third-parties on whom we rely for components of our service). We had dozens of servers ready to deploy, but we had no idea that this thing would eclipse everything else we’re doing quite so rapidly.

After a “deer-in-the-headlights” period, we decided to disable some of the features to reduce our load.

We also went on an emergency run to add servers… itself quite a story, because it’s not very easy to find 100+ industrial-strength servers in the middle of Memorial Day weekend! We spent Saturday loading a 24-ft truck from floor to ceiling with servers, and we spent Sunday “shucking” the servers (i.e. removing them from the boxes and styrofoam packaging), which itself takes many, many hours to unpack 100+ servers… all in preparation for the coming week. Facebook had told us that Memorial Day weekend is one of the slowest periods of the whole year for them. This is why we freaked out on Fri night when we saw that rather than slowing down towards the night as you’d expect, our traffic was still growing exponentially.

VB: What if, as some say, Facebook is the next Google. Google was search but now it’s building all sorts of apps (70+ at my last count). You’re saying FB won’t move in this direction? Tell me more.

AP: I think the more appropriate comparison is Microsoft. As we see it, Platform is to ordinary HTML what Windows was to DOS.

VB: What do you expect to be issues this week?

AP: Scaling to meet the demand. The best analogy I can make is that the spread of an app on Facebook is akin to the chain reaction that occurs in the core of a nuclear bomb… one atom splits, and sends particles in all directions, which cause neighboring atoms to split, and so on… In like manner, one person uses iLike, which notifies all their friends… In theory, there’s no reason why the growth would taper off at all — unless we run out of server capacity to handle it, or unless we begin reaching saturation of the entire Facebook community.

It feels a bit like Little Shop of Horrors… we keep adding servers to feed the beast and it keeps getting bigger and hungrier. Fortunately there are only a finite number of people in the Facebook community! Although I suspect Facebook’s own growth will accelerate dramatically, because people like us will contact their entire mailing list telling them to sign up for Facebook. The whole thing may seem insane, but remember, what’s at stake for us is the opportunity to become the music app for Facebook, which in turn could actually give us a shot at becoming the #1 music service in the world. Note that Facebook is the #1 photo service in the world, the #1 invite/event service in the world, etc.

A month ago, if I told anybody we could unseat MySpace in music, they’d say I was crazy. Today, it seems not only possible, but actually like it’s on track to happen unless we screw it up.

And that is an unbelievable turn of events, extremely eye-opening for me as much as anybody.

VB: Based on what you’ve experienced with platform so far, what are the main concepts that hackers/entrepreneurs and investors should understand.

As to wisdom with respect to Facebook, what I’d say is that anybody who is currently involved in building a consumer-facing website should be thinking about whether they should be building a Facebook app instead.

To me, the developers who don’t ask themselves that question are like the people building multimedia CD ROM software in 1996 who didn’t ask themselves if they should be building websites instead… i.e. companies that distributed maps of the country on CD Rom, or encyclopedias on CDROM, etc.

I think the Facebook platform is an epic, tectonic shift, a paradigm shift akin to Windows replacing DOS or the emergence of the Web itself.

(Editor’s note: We promised a 24-hour moratorium on Facebook coverage. That is now over.)

Here’s the early winner of Facebook’s open embrace of third-party applications, announced two days ago: iLike, a hot music service that lets you discover music that matches your tastes with others.

iLike’s users on Facebook have reached around 180,000 early this evening, from a mere 1,000 on Friday morning — that’s orders of magnitude larger than any other of the new Facebook applications (see full list here).

Let’s be clear. Facebook is in the news for a reason. Its open-door policy to other services — offering them a clear way to make money — is highly significant to the wider Web 2.0 community, and both a possible boon and risk for Facebook itself. Its 24 million young users give Web 2.0 companies a fertile playground for testing. Facebook offers a level playing field, which means that companies that gain traction — like iLike — are doing so not because of superior amounts of venture capital or scamming techniques, but because the community is voting for it (although it would be naive to say that clever marketing won’t happen from within Facebook). The risk for Facebook is in forgoing earning revenue from its own services.

So why iLike? There’s been a huge demand for music-focused socializing on Facebook (which isn’t surprising considering how central music is to MySpace users). iLike helps people find new music by learning what their friends are listening to; through Facebook’s platform, it allows users to add music to profiles and help them find their favorite concerts (and learn which friends are going to which concerts). iLike also offers free mp3’s that match users’ tastes. (VB’s earlier coverage here).

We should point out that the leading application also has an advantage because it tops the list of “favorites” at Facebook, and new users are likely to look closely at it — and so there’s a snowball effect.

However, in a fascinating twist on the music issue, another music app on Platform, called Audio, was No. 2 on Facebook with over 30,000 users when we checked this afternoon. It has since disappeared from the application directory. Created by a single developer, Numair Faraz, Audio allows users to search for and listen to tracks in the applications’ library of user-submitted music files. It lets them take tracks from Audio and add them to their Facebook profile page. Faraz told VentureBeat he was in the act of presenting the application to friends who work with major music labels when he discovered that it was gone. He called a Facebook Platform contact, who he says is investigating the matter.

Immediate calls to Facebook were unreturned.

Faraz told he’s assuming this “is just some sort of temporary glitch.” Users, in the meantime, can still add Audio to their profiles at this link — Faraz says that he’s still gaining users through news feeds.

Start-ups that integrated their free-standing services with Platform are getting more users than they can handle, as Om notes. Most of all, iLike. CEO Ali Partovi is currently crying out for more servers to keep up with demand (see email below).

A note on Facebook’s search: We searched for “iLike,” and got gobbledygook. The first result is “Tim Ilikeyomamabetter Alford,” and it goes downhill from there. Facebook claims its search does the equivalent of 10 percent of Google’s search traffic, but it will need some work.

iLike.com, the iPod-compatible social networking and music discovery company we raved about previously has raised $13.3 million in financing from Ticketmaster.

Ticketmaster will own a 25 percent stake in the company.

This makes a lot of sense for both sides. iLike needs cash to expand, and Ticketmaster is more than an investor. Ticketmaster will provide iLike users information about events where their favorite bands are playing, and then sell them tickets. Presumably, this is good for users, though to be honest, we’re always irked when Ticketmaster is the only way a venue offers tickets, because the fees are inevitably high.

Ticketmaster is owned by IAC/InterActiveCorp, which has been upgrading its efforts to merge its various properties at Ask City with local maps, events and reviews .

Ticketmaster’s investment includes an agreement to let engage iLike consumers “with deeply-integrated music and event discovery services intended to drive ticket sales,” according to the company’s announcement, to be released tomorrow.

Previous investors in iLike include Khosla Ventures and Bob Pittman.

[Update: The Fotodunk purchase price was $120,000. Our previous guess of between $1 and $5 million stemmed from a confidential discussion that turns out to have been misinformed. Apologies]

You’ve been hearing a lot about iLike lately, and they have more coming.

It’s a fresh a way of seeing a list of the music your friends are listening to, and to get recommendations on independent artists based on your tastes (we wrote about it here).

VentureBeat has been tinkering with it, and we find ourselves headed down to the Apple store to buy an iPod for the first time. We’ve been reluctant to buy an iPod so far, in a futile effort to avoid getting locked in — but iLike has pushed us over the edge. Here’s why: Simplicity.

There’s a lot going on, but iLike keeps things straightforward. A partial screenshot of iLike chief executive Ali Partovi’s profile on iLike is shown below. (We’ve cropped away other parts, such as his friends and comments sidebars). But you’ll see the music he has recently played. If you click on the “California Girls” link, a short MP3 will play. But here’s the cool part. iLike has just added a “play video” option, which searches for a video on YouTube that matches the song, and plays one if it finds it.

Moreover, if you look at his most-played artists (lower down on his profile, not shown in image here), you can click on one, say Jack Johnson, and it will take you to Johnson’s profile, which lets you try out snippets of all his songs on iTunes. There’s a whole bunch going on, including the emergence of a social networking phenom — people commenting on a “comment bar” of friends, for example. There are compatibility scores, so that if your friends are highly compatible with you in music tastes, you can get more recommendations.

In a way, this reminds us of Facebook. It is a clean, structured site that is useful for a group of people with a common interest (in Facebook, it was college life; in iLike, it is music discovery), but is not open to the garish creativity you find at MySpace.

Finally, this company, which has no ties to Apple other than a trademark agreement to allow it use the similar iLike/Garageband name, is going to be doing a lot more.

For example, iLike is upgrading its mobile offerings, VentureBeat has learned. It has quietly purchased Fotodunk, a site that lets mobile phone users send photos via email to a its server, and which uploads the photos directly into a Flash widget on a MySpace profile. The company is now working for iLike on a secret project, to be disclosed later. Our guess is the purchase was for between $1M and $5M [this was wrong; see update above] — not bad for three guys who started FotoDunk in April while still at Cal: David McIntosh, 19, Daniel Kluesing, 21, Alan Rutledge, 21. A fourth co-founder, Darian Shirazi, 19, left Facebook after two years of work in September, and joined the team before the purchase. (These guys met with the iLike folks at in a Fulsom St. bar in SF to sign the documents, but were forced to go into an alleyway to finish the deal because there were underage).

The service itself wasn’t that profound, but was very easy to use (see Mobilecrunch review). Helio, for example has offered the service before; but Fotodunk expanded it for use on all cell-phones. It launched in May, and had thousands of users within two weeks. We’re wondering whether they may just upgrade the photo service to video, and integrate it all.

End-of-week roundup in Silicon Valley:

The YouTube jig, and lecture — Here’s a link to a lecture that Jawed Karim, the co-founder of video-sharing site YouTube gave this week. It is a history how YouTube got to where it did. GigaOm has a good summary.

The site’s founders suffered at first; they couldn’t get pretty girls to post videos, despite offering payment. But the site’s three co-founders hit the winning recipe in June 2005, Karim explains, when they added four features that instigated viral growth: 1) related video recommendations, 2) one-click emailing to spam a friend about a video, 3) more social networking and user interaction tools like video comments, and 4) an external video player.

Speaking of Karim, we’ve just recognized him in a quirky video we’d seen last year and never quite forgotten. Remember the popular Matt’s Dancing video? Well, while scrolling through its related videos last year, we found a link to the video above (click on the image) of a guy at Stanford doing a silly imitation of Matt’s dance. Turns out, it was Karim.

Meanwhile, YouTube gets a facelift — Pete Cashmore has the details here. He also has a good analysis of how to game YouTube. He submitted a mediocre video, and auto refreshed it all Sunday night, which pushed the video to the third “most viewed” page and tenth in the “comedy” category. We’re hearing more about such schemes, and it raises questions about the authenticity YouTube’s stated traffic numbers. Users are realizing that unless they click on their video a thousand times, it will never get to the top of the pile. Professional marketers are getting involved, and spamming the system. We’ll have more on this next week.

iLike launches its music taste-matching service — We mentioned its plans to do so, after it raised $2.5 million, and how awfully similar its brand seemed to Apple’s (iLike’s parent company is GarageBand, which is a site for independent movie artists; GarageBand is also the name of an Apple recording site)

Anyway, iLike is designed for iTunes and iPod users, and its service offers them a bunch of features, including 1) a list of the music your friends are listening to that you don’t have, 2) personalized recommendations of free MP3 downloads from almost 200,000 independent artists, and 3) a iLike “SideBar,” which gives you a buddy list for discovering music through friends.

iLike displays a rating to show how similar your tastes are to other users, and lets you connect to them. You can post an iLike widget to blogs and sites like MySpace, hi5, Piczo and Live Spaces.

It is backed by Khosla Ventures and former AOL Time Warner executive Bob Pittman.

Veeker launches away to post video to any site while on the go — The stealthy Veeker has finally launched, and its essentially instant video messaging from the road — with a way to embed your video in any website. Mobilecrunch has the story . Veeker uses something called Multimedia Messaging Service (MMS), which is the multimedia form of texting. Mobilecrunch summarizes:

The most basic use case is to shoot 60 seconds of video from your mobile phone and upload this video to Veeker in the form of an MMS. Within about 60 seconds your video is on the Veeker portal where, depending upon whether you sent it to one of three addresses is visible only by you (me@ve