Last.fm’s three founders will receive $38 million each from the site’s $280 million sale to CBS, Times of London claims. Primary investors Index Ventures, which made a first round investment last May (partners Danny and Neil Rimer are on the Last.fm board), will reap $56 million, the paper said. though the size of that investment was undisclosed at the time, Times today says it involved purchasing a 20 percent stake for less than $5 million.
Meanwhile, German investor Stefan Glaezener will reportedly get $44 million from what was a 16 percent stake, stepping down as chairman but staying on as an adviser. Glaezener joined Joi Ito and Reid Hoffman as angel investors. Times’ calculations for the all-cash deal leave a gap of $66 million, which could be taken up by the remaining pair or by continued company running costs.
– Profit: BOA analyst Jonathan Jacoby estimates Last.fm is currently operating at a loss but should turn a profit this year, yet he scratched his head as to where the site will sit in CBS’ emerging online portfolio. (RadioInk).
– Users: As is typical, some veteran Last.fm users have expressed concern over the deal. One commenter at this site quit within hours, citing CBS ties to the RIAA, while many Last.fm forum users said they would not renew their subscription to the newly bankrolled outfit. But there has also been a fair amount of congratulation given by users around the site.
Asked whether the current webcasting royalties hike would limit Last.fm’s operations, company representative Russ wrote: “The answer is, it doesn’t change anything. We have agreements pending with major labels which allow us to bypass the silliness which is the US licensing situation.” And: “We now have access to CBS’ ops department, which will allow us to negotiate much better deals with content distribution networks.” And: “It would be a cold day in hell if Last.fm was bought out by a major record label