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INVESTMENT ROUNDS SUMMARY

Posted on: 09/26/2007

PANDORA

Probably over $40 million in funding; 120 employees. (Industry consensus is that they hope to be eventually acquired at a much higher price than Last FM was.)

Pandora: $30 million raised PLUS a new fourth round (11/07)
“Pandora doesn’t advertise. 120 employees. Less than $10 million in ad revs this year. Profitable within next 2-3 years.” “Said SoundExchange’s Executive Director John Simson, ‘We’ll have a proposal in a week to 10 days. These are licensees who pay us royalties. We want them to stay in business. I’m a Pandora user myself.’” — 11/16/07
http://jacksonville.bizjournals.com/jacksonville/othercities/sanfrancisco/stories/2007/11/19/story9.html?b=1195448400%5E1551891

Pandora thru Dec 05: $22.3 million in financing
http://www.bizjournals.com/sanfrancisco/stories/2005/12/12/newscolumn2.html?page=2

Interesting article comparing Pandora’s vs. Last.fm’s mathematical algorithms
http://www.stevekrause.org/steve_krause_blog/2006/01/pandora_and_las.html

Funny blog posting: “When not nailing your musical sensibilities perfectly, Pandora is great at shaming you..”
http://www.huffingtonpost.com/jack-donaldson/whistle-while-you-work_b_85379.html




LAST.FM

Recently sold for $280 million in cash to CBS (May ’07) about a year after receiving $5 million in funding. (Source: Story above in “Pandora” section.) Staff of 60, says Wikipedia.

First round of funding (date unclear)
http://www.prnewswire.co.uk/cgi/news/release?id=170159

Last.fm gets funding, MOG gets $1.4 million, SingShot gets $1 million… (2006)
http://www.mp3.com/news/stories/4435.html

Names of angel & first round Last.fm investors (May ’06)
http://www.redherring.com/Home/16800

Seemingly-reliable source of ‘$5 million’ number
http://thebrowser.blogs.fortune.cnn.com/2007/05/31/lastfm-links-up-with-the-tiffany-network/

CBS press release on acquisition
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-30-2007/0004597909&EDATE=

Interview with founders post-sale
http://www.guardian.co.uk/business/2007/may/30/digitalmedia.citynews

Feature interview, post-sale, with photos
http://blogs.guardian.co.uk/digitalcontent/2007/09/second_chance_tuesday_lastfm_t.html





YAHOO! LAUNCHCAST

To acquire its various Internet radio and music services, Yahoo! paid $4 billion (Broadcast.com) plus $12 million (LAUNCH) plus $160 million (MusicMatch):

Circa 2000, Cuban sold Broadcast.com to Yahoo! for $4 billion
Various sources.

Yahoo! acquired LAUNCH (Internet radio and music videos) for $12 million in June 2001
Lent it $5 million in bridge loans before acquisition
http://yhoo.client.shareholder.com/press/ReleaseDetail.cfm?ReleaseID=173851

Yahoo! acquired MusicMatch for $160 million (Oct ’04)
“As for Tuesday’s acquisition, Yahoo took the curious step of trying to develop its own technology but then paying $160 million for a company that does the same thing.” — Story #3 below
http://yhoo.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=146175
http://news.zdnet.com/2100-9588_22-5372075.html
http://news.zdnet.com/2100-3513-5366276.html

LAUNCHcast found “non-interactive” in court (Apr ’07); Sony claims it plans to appeal
http://www.paidcontent.org/entry/419-federal-jury-clears-yahoo-launchcast-over-sony-bmg-copyright-violation-/
http://www.billboard.biz/bbbiz/content_display/industry/e3i1043e7ff720693e99fffbf2b11a8c44d

Yahoo Music to be scaled back?
http://online.wsj.com/article/SB118938678775322168.html?mod=wsjcrmain
Currently 250-300 employees.
— 9/10/97





SLACKER

“$53.5 million in funding, more than 50 employees”

Interview with Slacker’s Mudd
http://www.laptopmag.com/Features/Interview-with-Slacker-CEO-Dennis-Mudd.htm?page=2

Slacker (3/07): 50 employees, $13.5 million in funding
3/17/07: http://www.physorg.com/news93342194.html

Slacker got $40 million more!
Article also notes, “Last.fm raised $5 million before being acquired by CBS for $250 million”
6/1/07: http://www.techcrunch.com/2007/06/01/slacker-gets-40-million-for-growth
Message board:
9/11/07: http://real.lithium.com/real/board/message?board.id=InstallingRhapsody&message.id=23562





RHAPSODY (REAL NETWORKS)

Music service purchased by Real Networks in 2003 for $35 million

Real bought Listen.com for $35 million, says Bratton
http://www.linkedin.com/in/timbratton

Real spent >$14 million on Rhapsody acquisition in Q3 2003 alone
“Approximately $14 million of cash outflow was related to the August 2003 Listen.com acquisition”
http://www.realnetworks.com/company/press/releases/2003/q303results.html

Real got $762 million settlement from Microsoft in Fall ’06
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/11/AR2005101100661.html

Real is a $900 million company (as of 11/26/07)
However, down from about $1.8 billion market cap a year ago.
http://online.wsj.com/quotes/main.html?symbol=RNWK&type=djn

Real rolls out revised Rhapsody (12/05)
http://money.cnn.com/2005/12/05/technology/personaltech/update_real.dj/index.htm

Real contributes Rhapsody in exchange for 51% interest in venture with MTV
MTV contributes $230 million in advertising plus URGE subscribers
8/22/07: http://www.contentinople.com/author.asp?section_id=429&doc_id=132215

Details on JV — MTV contributes cash (note), gets ad commitment
http://www.seekingalpha.com/article/45252-viacom-and-real-networks-join-forces-the-official-rhapsody-america-terms





LALA

Over $14.7 million already raised.

Received $9 million in funding (from Bain and Ignition) for convoluted plan
May ’06(?): http://www.crunchbase.com/company/lala
Oct. ’06: http://www.techcrunch.com/2006/10/10/lala-leverages-internet-radio-for-cd-swapping-sales/
Also Wizzard/Libsyn here: http://mashable.com/2007/03/01/lala-imooch-gaia-libsyn/
Lowest VC rating ever: http://vcratings.thedealblogs.com/2007/06/lalacom_seeks_riper_music_oppo.php

Lala raises $5.7 million more… but why?
Mar ’07: http://venturebeat.com/2007/03/02/lala-a-used-cd-trading-site-raises-57m-more/

Around 20 employees
http://arstechnica.com/reviews/other/lala.ars





AOL RADIO

AOL paid $400 million in June 1999 (during the bubble) for Spinner and Nullsoft (i.e., Winamp and Shoutcast).

http://www.news.com/2100-1023-226540.html

Spinner had received $12 million in funding four months earlier: http://www.news.com/2100-1023-221295.html

Surprisingly absent from all the acquisition activity, however, are the traditional radio companies, such as Chancellor Media and the CBS Group.

“I’m surprised television properties like MTV are scooping these companies up,” said Mark Hardie, senior analyst with Forrester Research. “I would have expected one of the big radio groups to buy [Imagine Radio].”

Mark Mooradian, senior analyst with Jupiter Communications, echoed that opinion. He noted that MTV’s entrance into Net radio “totally makes sense” but said it is “a huge missed opportunity for traditional radio. I’m surprised they’re not in the bidding here.”

According to the study, Internet radio and general Net use stand to cut into the traditional radio broadcast business. “Clearly, the Internet is changing consumers’ media habits, and it may erode radio listenership in the future,” Edison Media Research says on its site.





LIVE 365


Hasburned through $60 million“ in VC funding and raised additional funding since.

http://www.live365.com/info/management.html





MSN RADIO (MICROSOFT)

Spent at least $65 million to include such sets of stations as “Sounds Like” and “LocalSounds”… (Now just a white-labeled version of Pandora.)

MSN bought MongoMusic in 2000 for $65 million in stock. (Had 50-60 employees. Characterized songs by tempo, etc., for “Sounds like” or “Mood” radio (right?).)
http://www.news.com/Microsoft-to-buy-searchable-music-site/2100-1023_3-245453.html

MSN Radio Plus” initiative
http://www.news.com/Microsoft-turns-on-fee-based-Net-radio/2100-1027_3-1001144.html

MongoMusic employeed “groovers”
http://radar.oreilly.com/archives/2006/12/msn_radio_contr.html

Mood stations mentioned in user review
http://www.activewin.com/reviews/software/apps/msn/radioplus/

Broadcasters object to ‘Local Sounds’
http://www.denverradio.net/newforum/viewthread.php?tid=858

Mar ’05: MSN Radio ‘a shadow of its former self’
http://www.giantpath.com/TMIU/msnradio.html

Memo from departing MSN Radio employee to new staff
http://satanosphere.com/story/2006/4/18/01241/1339

Stupid survey!
https://www.msnfeedback.com/surveys/usa/radio_csat_0502004.htm





BOOMSHUFFLE (from Snocap)

At least $25 million in funding so far. Company’s primary business model (legal p2p music) is in trouble.

Dec ’04: Snocap raises $10 million in funding
http://www.crunchbase.com/company/snocap
http://www.news.com/Napster-founder-basks-in-funding,-label-support/2100-1027_3-5474929.html

*Mar ’06: Snocap raises $15 million in third-round funding”
http://www.paidcontent.org/entry/snocap-receives-15-million-third-round-funding/

Oct ’07: Snocap lays off 60% of staff
http://www.news.com/8301-10784_3-9796327-7.html?part=rss&subj=news&tag=2547-1_3-0-20

Nov ’07: Snocap launches BoomShuffle
http://blog.wired.com/music/2007/11/new-direction-f.html
http://www.appscout.com/2007/11/share_music_with_snocaps_booms.php





FINETUNE (from NextRadio Solutions)

“NextRadio has Sound Financial Backing, with a fund controlled by Adam W. Kirsch as its largest investor. Adam was a founder of Bain Capital, a global leader in private equity investing, where he specialized in consumer business investments including Staples, Sports Authority, Duane Reade, Wesley-Jessen, and Brookstone.”
http://www.radioamp.com/ — “About us”

Finetune review
http://blogs.zdnet.com/Stewart/?p=249





iLIKE

Has received at least $13.3 million to date (at a $52 million valuation)

Pittman’s iLike received $13.3 mil from IAC for 25% stake
http://www.crunchbase.com/company/ilike





MYSTREAMS

MyStrands has 10 C-level executives
http://www.crunchbase.com/company/Mystrands





SONICNET

MTV purchased Imagine Radio (for $14.5 million) in Feb. 1999, rebranded it as Sonicnet, and committed to $150 million in promotional support*

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/09/23/BU80751.DTL
http://findarticles.com/p/articles/mi_m0EIN/is_1999_Feb_23/ai_53938624




NETRADIO.COM

Was attempting to raise $35 million in an IPO in 1999. Succeeded, it looks like.
http://www.highbeam.com/doc/1G1-56288687.html
http://www.highbeam.com/doc/1G1-56336870.html





LOUDEYE

August 2006: “Nokia says its buying the Seattle-based digital music company Loudeye for $60 million, which aggregates content and rights from music labels for distribution across mobile, Internet and other platforms. Nokia said it is paying $4.50 per share. Loudeye’s stock had sat under $1 for weeks, mostly because investors did not give the money losing music service any chance of making it to the black. It had lost $4.6 million for the first quarter of this year on sales of $8.7 million. Loudeye previously sold its U.S. assets to Muze…”

http://gigaom.com/2006/08/08/nokia-snags-loudeye/




VENTURE CAPITAL FIRMS

Good online publication: TheDeal.com
http://www.thedeal.com

Index Ventures (Last.fm, etc.)
http://www.indexventures.com/cgi-local/ivw_port_detail.cgi?spgid=78






WEBCASTERS IN GENERAL

Free online music services: “You’ve been able to get free Internet radio for years, but today’s experience is truly personal and completely customizable… We tested five of the best free options and rated them… (Lala, Last.fm, Pandora, Rhapsody, Slacker)”
http://www.laptopmag.com/Features/Free-Online-Music-Services.htm?page=0





DEVICES

Google Android to bring full web functionality to cellphones in Q3 2008?
http://www.laptopmag.com/News/Cell-Phones/Google-Announces-Android.htm







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