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Good Guys Come In

It's about time that acquisitive hands began to discover the music discovery sites. CBS (NYSE: CBS  ) is buying for $280 million, and one has to wonder whether the phones aren't ringing over at rival discovery sites Slacker, iLike, and Pandora this morning, too.

Yes, IAC/InterActiveCorp (Nasdaq: IACI  ) is a strategic partner of iLike, but it's really just a matter of time before more of these popular websites become wholly owned subsidiaries of larger media companies, hungry to catch the eyes and ears of the growing media streaming audience.

If you have never stumbled across a music-discovery site, you don't know what you're missing. Free sites like are able to deliver musical artist and track recommendations by tapping into music that you already like. The major sites aren't identical, but the end result is the same. They are sticky apps that help introduce you to new tunes. attracts 15 million active users, taking part in the music discovery process as well as the site's community-enhancing features. It's a better fit with CBS than you may think. CBS has a massive network of radio stations and also recently relaunched its CBS Records music label.

Music discovery sites are also growing up in a hurry. While higher royalty rates threaten many of the free Internet radio stations, sites like Pandora and Slacker are in the process of rolling out hardware to serve up personalized streams to music fans at home and on the road. In other words, these seemingly harmless music sites may soon be a threat to portable media companies like Apple (Nasdaq: AAPL  ) , music subscription services like Napster (Nasdaq: NAPS  ) , and satellite radio providers like Sirius (Nasdaq: SIRI  ) .

So kudos to CBS for hopping on the trend earlier -- and cheaper -- than the others that will no doubt follow.

CBS has earned three stars in Motley Fool CAPS. Do you have an opinion on the company? Bring it to CAPS!

Longtime Fool contributor Rick Munarriz has always been a fan of music that goes mostly unheard, dating back to the original site. He is also part of the
Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.

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Related Tickers

10/21/2016 4:00 PM
CBS $57.66 Up +1.17 +2.07%
CBS CAPS Rating: ***
AAPL $116.60 Down -0.46 -0.39%
Apple CAPS Rating: ****
IAC $66.19 Up +0.36 +0.55%
IAC/InterActiveCor… CAPS Rating: *****
NAPS $2.64 Down +0.00 +0.00%
SIRI $4.15 Up +0.02 +0.48%
Sirius XM Radio CAPS Rating: **