More details are starting to emerge on the perplexing pending sale of iLike to MySpace for a reported price of $20 million. Boom Town's Kara Swisher reports that iLike founders Ali and Hadi Partovi canceled a board meeting yesterday because of "thorny tax implications related to the talent-retention part of the deal." 

Meanwhile, TechCrunch's Michael Arrington -- who broke the news earlier this week -- says the deal would be a "lose/lose" situation for Facebook. Arrington asks:

Why didn’t Facebook just buy iLike? A matching or slightly better offer than the $20 million MySpace is paying would likely have gotten the deal done. And it may have saved Facebook from an embarrassing situation.

Arrington also points out that iLike -- which recently launched its own music download store -- could take over that function on MySpace from Amazon.com.

Swisher reports that the iLike-MySpace deal is moving forward and could be consummated as early as this week despite some of the tax snafus. She too reports that the purchase price is about $20 million, including $13.5 million in cash and about $6 million to retain the Partovis and other key members of the iLike team.

According to Swisher, iLike employees will be able to remain in Seattle though they will have to stay on with MySpace for two years in order to collect their retention payments.

iLike, with about 50 million registered users, including roughly 10 million active users on Facebook, raised $16.5 million from venture capitalist Vinod Khosla, Ticketmaster and others. It once commanded a valuation of more than $50 million and had long been the subject of buyout rumors, so if the current purchase price is on the mark no one is really getting rich on this deal.

The Partovis, twin brothers who have had success in the past in the Internet business, certainly had bigger plans for the company. In 2006, Hadi Partovi told me that they were struggling to add servers to keep up with growth. At the time, he explained the mission of iLike as a new type of online music company.

"We don't want to provide a substitute for ownership of music," he said. "We just want to provide connective tissue for discovery of music."

TechFlash readers have been discussing the economics of the deal, with some pointing out that $20 million is a fair price for the company. Others expressed concern that it spells trouble for consumer-oriented Web startups. 

"I guess hindsight is 20/20 but if ilike can only get $20M for what has clearly been a successful product, not sure that makes the rest of us feel too warm and fuzzy about starting a new company?" wrote on reader.