Slacker, a recently launched web radio service, has raised $40m (£20m) in a second round of funding, to add to the $14.5m (£7.3m) raised in a Series A round of funding earlier this year.

According to peHUB, Centennial Ventures and Rho Ventures were new investors, while Austin Ventures, Mission Ventures and Sevin Rosen Funds, which had participated in the first round, invested again.

And it turns out that Slacker has some serious non-web ambitions…, acquired by CBS for $280m recently, managed to grow its business on a fraction of the $50m raised by Slacker - around £2.5m in VC funding – so why does Slacker need so much?

Well, the answer seems to be that Slacker, as well as creating a social music recommendation service and desktop application a la and Pandora, the company also plans a portable music player and needs the cash for product development.

The portable player will allow users to listen to their Slacker radio on the move, and communicates with Slacker’s servers to keep playlists up to date.

Is challenging Apple / Creative / Sony a wise move? Wouldn’t it make more sense to create a downloadable app for mobile handsets?

This feels like a dangerous move from Slacker, or at least one that will surely haemorrhage lots of cash in the research / product development phase, not to mention the millions they’ll need to spend to market the device.

Maybe there’s no money in internet radio?