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MySpace (NASDAQ:NWS) is about to buy iLike to galvanize its leadership in music, and the deal, if it goes through, is a sign of the times for two reasons:

1 - At a rumored $20M price tag, the deal is anything but a hit, from TC:

The company has raised a total of $16.5 million from the founders, Scott Banister, Bob Pittman, Vinod Khosla and Ticketmaster to date. But their last round of funding was in 2006, where Ticketmaster put the bulk of the capital in via a third round of financing that valued the company at a whopping $53.2 million.

In Q4 2008 Ticketmaster wrote down a number of their venture investments, including a $5.8 million charge for iLike. Internally, they valued that $13.3 million investment at just $7.5 million. Last month we reported that iLike was considering a new round of financing that would cash TicketMaster out of the company.

But, music is a bitch to monetize and everyone is facing down rounds, which is a major threat to VCs, in my opinion, as entrepreneurs will rather walk than see their already squeezed ownership stakes get diluted even further.

2 - Distribution over Destination

You will see more and more companies look to extend their reach outside of their owned and operated properties. iLike is the top music application on every social network (including Facebook) aside from MySpace, which owns MySpace music.

Ultimately, with the exodus of talent from MySpace, I think a major driver here is the talent that will come with the deal, namely: Ali Partovi, Hadi Partovi and Nat Brown, and the underlying technology.

Source: MySpace's Buys iLike: Sign of the Times