• by September 14, 2004

Big news from Yahoo! today. The online giant scooped up Musicmatch, the music download service, for $160 million in cash. The acquisition makes sense for Yahoo!, and here's why. While its Launch music video service is great and racks up loads of streams, Yahoo! doesn't have an online store for music downloads. It's sat on the sidelines while Apple launched the phenomenally successful iTunes music store. Interestingly, Microsoft unveiled its MSN Music Service, which includes music sales, just a couple of weeks ago.

Musicmatch claims to offer more than 700,000 tracks for download. It also has the popular Musicmatch Jukebox software that enables consumers to organize their music and burn CDs.

Both Musicmatch and Launch offer streaming radio services; the Musicmatch Radio network offers access to more than 900,000 tracks and more than 200 pre-programmed stations. The marriage of Musicmatch and Yahoo!'s Launch is expected to nearly double Yahoo!'s reach from 12.9 million users to 23 million, based on data from Nielsen//NetRatings as of August.

It will be interesting to see how Yahoo! integrates Musicmatch over time.