Yahoo! purchased online music service MusicMatch in September for $160 million. The move was intended to intersect the migration of those already online for other reasons by using Yahoo’s ISP service. MusicMatch has more than 700,000 songs available for download but has never been a major factor in the download biz. This deal will give it approximately 23 million users. The acquisition strategy centers around "Launch," Yahoo!'s streaming service that allows users to create personal online radio stations with LaunchCast. MusicMatch also operated Dell's online music store, which accompanies the Dell DJ music player. MusicMatch is available for Windows only.
Apple, Microsoft and Yahoo! will now compete for downloading dollars. Apple has a significant installed hardware base, while MS and Yahoo! have extremely high-traffic Web sites. Wal-mart and Coke are players, but with significantly less market share.
It is evident that music consumer is migrating away from prerecorded physical media; the music business is clearly migrating away from the record labels, which appear to be evolving into catalog rights holders and toward computer-based companies such as Apple, Yahoo! and MSN.