Last.Fm, a UK-based social music platform, was bought by US media giant CBS at the end of May for £140m ($280). Not bad for a company that was founded in 2002 by a bunch of enterprising young guys with a good idea.
It's been touted as the largest European Web 2.0 purchase to date and gives even more weight to the so called second generation of internet—Web 2.0—based on collaboration and sharing between users.

The acquisition has got industry experts talking about how Web users are driving change. Robert Andrews of tech website Wired wonders whether European start-ups, particularly those based in London, have caught up with Silicon Valley-based firms: "London is swinging again," he writes. "Some are calling it London 2.0." While the BBC's online tech page suggests the buy-out signals a second dot com boom: "The three founders will now be among the most successful—and potentially wealthy—Web 2.0 pioneers in the world," it says.

Martin Stiksel, one of the three co-founders of Last.Fm, says their intention was always for it to be a business, not a hobby, but that in 2002 there was "no money in the online music space. We kept our options open, but there was no gameplan." It took much longer than they imagined to establish the business and the first programme was a challenge. "There was a lot of blood, sweat and tears and I lost some hair. We stuck at it in the face of adverse circumstances. We gave up everything to see it through."

Stiksel thinks the partnership works because each of the co-founders has a diverse skill set. Richard Jones (who designed Audioscrobbler, which helps to collectively build the social music platform), has a computer science degree. Felix Miller played in a punk band. Stiksel himself was a music journalist and DJ. "We complement each other nicely. And we didn't listen to anyone who told us it wouldn't work."

He's stoical about the backlash from some of Last.Fm's users (which number around 15 million) who claim that the independent company has sold out. "It could have been expected," he says. "But it shows that people care about the site. We've done it to make it better, to improve the site and make it more entertaining. Our original goal was to make it the last music destination you'd ever need. Where you could listen, look, read and buy. CBS will continue with that strategy. It thinks, 'if it ain't broken, don't fix it'." The original management team will remain in charge, he adds.

So what does Stiksel think CBS saw in his little, 50-employee Web 2.0 outfit? "A highly motivated team with a vision and an understanding of its audience." And aside from the money, Stiksel says there are huge benefits for Last.Fm, too. "The US is the biggest music market in the world and it's good to have a strong partner on side. Before, if we messed up, the whole company would go up in smoke. This puts us on a stronger footing."

He's bullish about the future for tech firms, despite the threat of a boom and bust similar to 2001. "I don't think companies then were built on solid foundations. There wasn't enough uptake to justify the exuberance. Today, there's a lot of time and money spent on the internet—there's massive uptake everywhere. In my opinion, the hype is justified and realistic."

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