UMG agrees to provide free music on Imeem's Website

Social networking Web site operator Imeem Inc. on Sunday entered into a licensing agreement with the world’s largest recording company Universal Music Group or UMG, under which the former company will have full access to the music and videos by the record company's artists.

In a joint statement yesterday, the two companies said that they have inked a deal, under which will give San Francisco-based Imeem access to full-length recordings of the music company's entire digital music and video catalog.

Under the terms of the deal, Imeem will offer free streaming of Universal’s extensive digital music and video catalog in exchange for a share of online advertising revenues, the companies said in the statement.

The UMG/Imeem deal comes as the latest example of record labels betting on online advertising as a source of revenue amid sinking compact disc (CD) sales.

Imeem, the free music site/social network, has already inked deal with three other major record companies, including Sony BMG Music Entertainment, Warner Music Group and EMI Group. UMG, owned by Paris-based media and communications company Vivendi, is the latest recording giant that has agreed to provide its songs to online social network Imeem.

Both the companies did not disclose financial terms of the deal.

Universal's record labels have many of the world's biggest artists including Shania Twain, Bon Jovi, Elton John, Method Man, Tupac Shakur, Aaliyah, Jay-Z, Mariah Carey, Eminem, Dr. Dre, Diana Ross, Reba McEntire, Luciano Pavarotti, U2, Kanye West, Amy Winehouse, Fall Out Boy, Black Eyed Peas, Gwen Stefani, The Killers, Snow Patrol, Maroon 5 and 50 Cent.

"Imeem has developed an way to make our artists' music a central part of the social networking experience. More importantly, they are working with UMG to provide an musical experience for consumers, while ensuring that our artists are fairly compensated for the use of their works," said UMG chairman and CEO Doug Morris.

Collectively, the all four recording giants account for more than 85 percent of music sales so far this year.

"Our agreement with UMG will make imeem's media-centric experience even more compelling and firmly establishes our position as the leading social media network," said Imeem founder and CEO Dalton Caldwell.

Launched in 2004, the closely held Imeem claims around 19 million monthly users. Besides offering instant messaging and file-sharing software, it also allows its users to embed songs and music videos on their personal pages and playlists, and even to post their own videos like other social-networking sites, including Google Inc.'s YouTube.

Several brands and companies including Apple Inc., Microsoft Corp., Nike Inc., AT&T Wireless, Toyota Scion, T-Mobile and Puma, are currently advertising and sponsoring brands on Imeem’s Web site.

With a deal with all four major music companies, Imeem, which is backed by Sequoia Capital, the venture capital fund that supported Google and YouTube, now will be able to drive more traffic, and consequently generate more revenue.