CBS buys online music site Last.fm

By Kate Holton and Kenneth Li

LONDON/NEW YORK (Reuters) - CBS (CBS.N) said on Wednesday it bought Last.fm, the online music service that allows fans with similar tastes to connect, for $280 million (142 million pounds) in a bid to attract young audiences.

The London-based service has more than 15 million active users in over 200 countries, CBS said, and has earned praise for a system that recommends songs by tracking users' music-playing habits and linking them to other fans with similar tastes.

Within a year, CBS aims to explore applying Last.fm's technology to building new communities for online videos that will include its own archive of hit shows and videos not owned by the company, CBS digital chief Quincy Smith said in a phone interview.

Smith said he sees the technology potentially used across CBS' content portfolio, which includes materials of book publisher Simon & Schuster and CBS Radio.

He compared the deal with News Corp.'s NWSa.N acquisition of the popular MySpace online teen hangout, which set off a series of Internet acquisitions by traditional media companies.

"We're emulating what Fox did with MySpace," Smith said. "There are a lot of super-cool, whiz-bang applications they have that I can't wait to apply to other parts of the business."

Like Last.fm, MySpace was started with a keen focus on music but has been broadened by new owners to apply to videos and lifestyle topics.

The deal is part of CBS's broader plan to expand its audience and improve its connections with viewers through the creation in April of the CBS Interactive Audience Network, a broad Internet distribution network for its shows.