Rhapsody Takes Over Yahoo's On-Demand Music - InformationWeek

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2/5/2008
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Rhapsody Takes Over Yahoo's On-Demand Music

Yahoo's change in music offerings comes as Microsoft tries to acquire the company for $44.6 billion.

Yahoo's on-demand music service will be managed by Rhapsody, the company said this week.

Yahoo Music general manager Ian C. Rogers announced the Yahoo Music Unlimited partnership through his blog on Monday.

Rogers said the music service took resources away from other objectives. That includes music.yahoo.com, the company's music video site, and Launchcast Radio, which allows users to create their own "stations."

Rogers characterized the decision as a "major strategic shift" and said that Yahoo Music draws 25 million users a month, but the unlimited service accounts for a small portion.

"It wasn't an easy decision," he said. "We're huge fans of Yahoo Music Unlimited and those customers include many of our most loyal and valuable."

Yahoo Music Unlimited subscribers will be able to migrate easily to Rhapsody, and sometime this year music.yahoo.com will integrate with Rhapsody, allowing customers to use music.yahoo.com, as well as Rhapsody, with no increase in price. The service will work with PCs, Macs, Firefox, Safari, TiVo, and Sonos, Rogers said.

"We sincerely apologize for any hassle and thank you for joining us in the Yahoo Music Unlimited run," he said. "It was a wild ride for all of us."

Rogers said the decision does not mean that Yahoo will decrease music investments. He said the company acquired FoxyTunes, a media toolbar for Firefox and Internet Explorer that works with more than 30 media players, allowing users to look up lyrics, bios, and videos while they listen to songs.

The change in music offerings comes as Microsoft attempts to acquire Yahoo for $44.6 billion. Less than a week ago, Yahoo announced an earnings loss of 23% and plans to cut 1,000 jobs.

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