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Skype founders unveil Spotify clone

Streaming music. iPhone app. Recommendations. Zzzz

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Skype founders Niklas Zennstrom and Janus Friis have unveiled their latest venture, Rdio, for specially invited beta testers.

It ticks most of the boxes for a generic 'access model' music service: streaming music, a buy option, a 'cloud' locker service for your songs, mobile clients for iPhone, Android and Blackberry, and integration with social networks Facebook and Twitter. Are you still awake? Good - there's also a subscription plan, which will be available for between $5 and $10 a month.

It's a crowded market, with Rhapsody and Pandora well established in the US, and more recent players such as We7 and Spotify have entered the market. Google and Apple are tipped to enter the space too.

The founders believe they can differentiate themselves through Rdio's social networking features. But the opposite is probably true: every service now has social networking features. A more persuasive differentiator might be 'Think For Yourself', where you can make up your own mind, based on the music, and free from unwanted opinion.

According to reports, it's backed by Friis and Zennstrom's own venture capital fund, and is a much more modest affair than their last venture, employing around 23 staff. They picked up the Rdio.com domain name for a mere $5,000.

Their last venture, Joost, employed 150 staff when it was unveiled. The P2P TV company hyped what it called a farm of "Long Tail Servers", but it desperately needed professional content, and TV companies weren't impressed by the advertising pitch. Joost officially went titsup last October.

Zennstrom and Friis rose to notoriety thanks to Kazaa, a poor knock off of Gnutella, written by Estonians and bought in. They founded Skype in 2003, wrapping open protocols in a proprietary offering, and sold it to eBay two years later for $2.6bn. The pair bagged $530m from the deal.

eBay later acknowledged it massively overpaid for the company; it could have connected buyers and sellers using free VoIP calls for a fraction of the cost. eBay divested itself of the acquisition, but before it could get rid of the albatross completely there was another unpleasant surprise.

eBay had forgotten to license the core proprietary technology it thought it had acquired in the deal. Zennstrom and Friis sued successfully last year.®

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