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September 14, 2004

Yahoo! Buys MusicMatch

Yahoo! and MusicMatch announced today that Yahoo! will acquire Musicmatch for $160M in cash.

Jumping into music downloads signifies a switch from Yahoo's past music strategy, which has focused on streaming audio and video through Launch, a subsidiary that Yahoo bought for $12 million in 2001. Yahoo also distributes the Napster music service, which lets customers buy music downloads and sign up for subscriptions.

Industry analysts said that while the Musicmatch acquisition helps to round out Yahoo's array of digital music services, it will be hard for the company to compete with more established players such as Apple, since the computer maker markets both downloads and one of the most popular devices for playing tunes, the iPod.

Musicmatch currently charges $9.95 per month for its on-demand music service, offers individual downloads for 99 cents per song, and offers an online radio service free of charge.

Posted by Basileios at September 14, 2004 10:17 AM

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