About ten years ago, third-year computer science student Richard Jones wrote the code that would eventually earn him $38 million.
His creation, AudioScrobbler, was a simple plug-in that tracked what people were listening to on various programs including iTunes and used that information to build an online profile of their listening habits that could be shared with friends or used to fuel music recommendations.
Last.fm acquired Audioscrobbler in '03, earning Jones 15 percent of Last.fm. Four years later, CBS bought Last.fm for $280 million, making Jones a multi-millionaire several times over. CBS let Last.fm perform more or less as it had done, expanding its reach to an estimated 40 million users, turning it into a mobile app, encouraging developers to build stuff around its user profiles, and using its knowledge to power radio services for partners including AOL.
Meanwhile, Facebook was busy building its "Open Graph" - a profile of not just musical Likes, but movies, friends, books, education level, employment, social popularity, location, and anything else you can think of - and that was in 2008, well before it launched Facebook Music last week.
Facebook now "scrobbles" from every major music subscription service, as well as many streaming radio services, and even recent upstarts like Turntable.fm. Unlike Last.fm, it actually provides the log-in authentication for many of these services, so it scrobbles what people do there automatically - even from users who aren't smart or involved enough to figure out how to install an audioscrobbler plug-in, or enable it in programs like Spotify.
Yes, you can scrobble from Turntable.fm to Last.fm - but that means using Google Chrome as your browser and install a Chrome extension. On the other hand, you scrobble from Turntable.fm to Facebook by simply using it as you normally would.
Facebook's scrobbling not only requires less effort than Last.fm's - but less than a week after its launch, it arguably draws from more sources. MOG knows what you play on MOG. Spotify knows what you play on Spotify. Slacker Radio (and possibly Pandora) know what you play there. But only Facebook knows what you do on all of those services, can combine that data, and match it against your degree of influence over your friends, because it knows when they click on something in your stream.
If your listening habits influence your friends, Facebook knows about it - and also understands that ads targeted to you are more valuable. You're what the marketing types call a "tastemaker." Last.fm has no visible mechanism for tracking that, because it is not a social network on the level of Facebook.
As if that weren't enough, Facebook also trumps Last.fm by tracking not only musical activity but, as mentioned above, the news articles you read, the television shows you watch, the movies you rent, the friends you have, and more - anything that uses Facebook as a log-in or is part of Facebook's new and growing scrobbling ecosystem. All of these partners, from every media industry, have a big incentive to join up, because Facebook's new Ticker and Timeline features are powerful engines for promoting content.
There is one thing Last.fm does that Facebook Music doesn't, as Evolver.fm's Andy Cush pointed out: It scrobbles from iTunes. However, it's looking more and more like Last.fm and iTunes are consoling each other outside the Facebook party, where all the action is. If a song plays in iTunes and Last.fm scrobbles it, do your friends know? For most people, the answer will increasingly be "no" - they'll be too busy seeing what you're up to on Facebook.
Last.fm recently added the ability to find your Facebook friends on Last.fm and add them as friends there, so you can see what they're listening to, assuming they have the knowledge and willpower to add scrobbling to all of their devices. But why would the average person do that, when their friends are already scrobbling to Facebook instead, from Spotify, MOG, and countless other services - all without anybody installing or understanding anything?
Richard Jones made $38 million by inventing scrobbling. Ten years later, Facebook stands to make billions from the same concept. It's successful strategy: to accumulate an audience so large that media services would build Facebook scrobbling into their products, rather than counting on users to install a plug-in.
Apple will sell hardware and apps no matter what happens, and could still join Facebook Music when iCloud launches later this year. For Last.fm, a ten-year headstart will not be enough to stave off the growing Facebook juggernaut.