Media Perspective: Everyone has their price - has Last.fm sold up or sold out?

Depending on your point of view, last week's story of the £142 million sale of Last.fm to the US media giant CBS could be read as a parable foretelling the ruination of Web 2.0 or a fairytale underlining the next boom in its development.

More so even than MySpace's sale to News Corporation, the Last.fm deal has attracted bitter criticism from its supporters to match the plaudits lavished on its UK founders by the wider media industry. This is perhaps because its music services, which allow users to construct their own "radio station", playlists and interact with other users, have created so much passionate support among its 20 million users.

Posting on his blog last week, the Last.fm co-founder Richard Jones (a 24-year-old who is reportedly set to pocket £19 million from the sale) reassured users that the deal would only change Last.fm for the better. He pointed out that it would continue to be based in London but would now have the resource to "execute our world-domination plans" and have more clout when negotiating licensing deals.

This didn't halt the invective from some of Last.fm's more passionate users. "Last.fm, along with the rest of all these 'Web 2.0' sites being bought, are too greedy for money," a "Mr Johnson" wrote in response. "You are not staying with what your followers want, you are selling out. The future of Last.fm looks bleak."

An overstatement perhaps, but an indication of the issues Last.fm will face. It retains a homespun culture, a byproduct of the backgrounds of its founders in the music and technology worlds. However, it is now facing up to reassuring its users that personal data built up when they use Last.fm's "scrobbling" technology (which allows users to personalise their experience based on previous listening habits) will not be sold on. Second, it now has to embrace the ad community, a process already underway (mainly with the music industry), although it currently has a charming, almost anti- advertising approach. Listing the benefits of subscription (at a cost of just £1.50 a month), its website says: "No ads! You won't see them; visitors to your page won't see them. No-one will, because they won't exist."

It will be interesting to see if this will change. Jones has already assured users that the deal won't result in ads suddenly appearing "in stream" (a feature of launches such as Joost.com), but there are signs that it is already stepping up its commercial operations and it is hunting for a senior ad sales executive to develop a strategy.

This might alienate a few of the loyalists who have been with it since 2002, but Last.fm's offer, which is expected to make it profitable by next year, seems so rock solid that it could become one of a number of sites that symbolise sustained success rather than rapidly evaporating hype.