Three entrepreneurs behind Last.fm, the music and social networking website, became the latest internet millionaires yesterday, receiving windfalls of $38 million (£19.25 million) each after CBS Corporation bought the group for $280 million.

Felix Miller, Martin Stiksel and Richard Jones, who launched the site four years ago, earned their fortunes after signing an all-cash deal with the American broadcast and media group.

Last.fm – an online radio station that creates personal playlists – has about 20 million members in 200 countries. The site can create the playlists by tracking and analysing users’ listening habits using software called Audioscrobbler developed by Mr Jones, 24, a computing graduate.

CBS, the television group, said that it had bought the site to attract younger viewers and listeners across its business.

The acquisition puts an end to months of speculation over possible buyers for the site, which had been tipped as the next big thing after MySpace in the music and social-networking online sphere.

The sum agreed with CBS is lower than previous estimates, which had valued Last.fm at $450 million. However, the founders and leading investors said that they were happy with the price.

Index Ventures, the European venture capital group that acquired a 20 per cent stake in Last.fm in 2006, stands to pocket the biggest gain from the sale, at $56 million.

Last.fm used the cash injection from Index, understood to be less than $5 million, to relocate to offices in East London and hire more staff. “In a very short period we were able to build something that had global significance and that’s reflected by the price and the buyer,” Danny Rimer, Index Ventures co-founder, told The Times.

Stefan Glaenzer, the German investor and chairman of Last.fm who is credited with bringing the website to the attention of buyers, stands to gain $44 million from the sale of his 16 per cent stake. He will retire as chairman but will stay with the group in an advisory role.

Martin Stiksel, 32, an Austrian former DJ, developed the original idea for the site with Mr Miller, 30, from Germany, before teaming up with Mr Jones in 2003.

The takeover comes as Last.fm, which will remain under the management of the trio, expands rapidly into new areas. Last month, it emerged as a competitor to MTV.com after launching a music video streaming service. The group is also understood to be in talks with Channel 4 to create a worldwide music chart using software that can track the popularity of songs.

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