Last.fm dumps streaming, focuses on recommendation
So, why the switch?
Last.fm says it's because of the way people actually use the service: mostly, they get their tracks elsewhere and use Last to find out what to listen to next. Recommendation and discovery are the things Last.fm does best, so they've decided to leave the playing to the players, which will include MOG, Spotify, The Hype Machine, We7 and VEVO.
Reading between the lines a little bit, it sounds like Last.fm wasn't getting a big return on the bandwidth costs it was putting out for streaming, especially in an increasingly competitive music app market. At this point, it's probably a smart business move to devote more resources to becoming the best damn music discovery resource on the planet, instead of yet another streaming music provider. And of course, this means that anything you play on these partner sites will "scrobble" to Last.fm and count in your listener data.