Social-Networking Site Feeding Frenzy

UPDATED: Social-networking startups continue to be a fertile playground for acquisitions, as CBS  today acquired music network Last.fm for $280 million in cash and Fox Interactive Media nabbed Photobucket and Flektor in separate deals.

Last.fm, one of the largest social-networking sites, with more than 15 million users around the world, brings together music lovers with similar tastes.

The network uses technology it calls “scrobbling,” which catalogs songs users listen to and adds them to users’ music profiles to connect users who share similar tastes. Last.fm also provides custom radio streams and lists over 200,000 festival and music events around the world.

A decades-old aggregator and purveyor of multiple entertainment and news mediums, CBS already boasts a major radio network of 144 stations. Buying Last.fm will make CBS a serious contender in the hip social-networking scene for online music.

It will also boost the company’s portfolio of popular online properties, something CBS has been eyeing greedily with the rapid ascendance and acquisitions of such phenomena as News Corp.’s MySpace and Google’s  YouTube.

“Last.fm adds a terrific interactive extension to all of our properties and also is a huge step in CBS Corporation’s overall strategy of expanding our reach online to transition from a content company into an audience company,” said Leslie Moonves, president and CEO of CBS, in a statement.

Last.fm team founders Felix Miller, Martin Stiksel and Richard Jones and their team will continue to independently run the online network while helping some CBS divisions expand communities and businesses online and within the mobile space, CBS said.

Meanwhile, rumors of Photobucket’s acquisition were not exaggerated, as News Corp.
 division Fox Interactive Media (FIM) agreed to buy Photobucket and Flektor for undisclosed sums.

Photobucket, rumored to be an acquisition target of Fox property MySpace for three weeks, offers photo- and video-sharing services, while Flektor offers users tools to mash up photos and videos into slideshows and live interactive presentations.

Photobucket, which has over 42 million users linking personal photos, images, slideshows, and videos to thousands of Web sites, will operate as a standalone site while its technology and tools will be used to enhance sites across the FIM network.

“The acquisition of these two companies is a perfect strategic fit for us that reinforces FIM’s leadership in user-generated content,” said Peter Levinsohn, President of Fox Interactive Media.

The deal also brings to a close a contentious gripe between MySpace and Photobucket.

MySpace claimed last month Photobucket violated its user agreement with the online community by encouraging users to post advertisements for Spider-Man 3 in their videos. MySpace’s policy is not to allow third-party vendors to advertise on its site.

MySpace responded by temporarily blocking Photobucket photos and videos.