• by Mark Walsh  @markfwal, May 8, 2008

Online music provider Last.fm will power AOL's Internet radio service in Europe in a partnership that expands on existing ties between AOL and Last.fm parent CBS.

The new on-demand service will initially be available in France, Germany and the U.K. with plans to roll out across Europe in the coming months.

The alliance builds on a deal struck in March under which CBS Radio is providing AOL Radio an array of content in the U.S., including over 150 music, news, talk and sports stations. In addition to providing content, CBS has assumed responsibility for ad sales for all of AOL's 200 online stations as well as the 140 stations it brings to the table.

Last month, Last.fm reach a separate agreement with CBS Radio to stream live broadcasts from the network's radio stations, while giving listeners from the CBS Radio Internet Network access to Last.fm's library of free online music.

The latest partnership allows AOL Radio's European users to listen to any track repeatedly on Last.fm as well as providing access to other content including videos, pictures and event listings. A recommendation feature also allows people to share and discover new music.

AOL will handle ad sales for the Internet radio service. "Monetizing great content is key to AOL's success," said Jonathan Lister, senior vice president of European operations. "The rich engagement that users have with this site allows us to maximize the revenue potential available."

U.K.-based Last.fm was acquired by CBS a year ago for $280 million. The site says it has 21 million unique visitors globally.