• by Wendy Davis , Staff Writer @wendyndavis, May 30, 2007

Hoping to stake a claim in the popular social networking space, CBS has purchased music recommendation company Last.fm for $280 million.

Like rival Pandora, Last.fm allows users to enter the music acts they like and then suggests other musicians to users. But unlike other companies that rely on objective facts about bands, Last.fm bases its recommendations on the preferences of other members. So, when users provide Last.fm with the name of a favorite group, the company makes recommendations based on the preferences of other people who also like that group. Members also can create profiles and then receive personalized streams of music.

CBS's acquisition comes at a time of increased activity surrounding digital music. Consider, Amazon recently said it was going to start selling music downloads, while Apple today began offering tracks from EMI without digital rights management restrictions. Additionally, late last year Pandora agreed to power MSN's online radio service.

Even MySpace, purchased by News Corp for $580 million in 2005, first made a name for itself as a site for independent musicians.

Currently, Last.fm isn't known primarily for selling downloads, but that might change under CBS ownership. But even without a huge amount of sales revenue, Last.fm's audience alone seems likely to give CBS a big boost online.