Yahoo! Gets Behind Rhapsody

It had been rumored for months that Yahoo! was going to get out of the subscription music business. Yesterday, they announced that they were shutting down Yahoo! Unlimited and turning over the subscriber base to Rhapsody. Yahoo! also announced that they are buying the Firefox plugin called FoxyTunes. The coolest thing about FoxyTunes is their web service called FoxyTunes Planet which is like a netvibes for music. Here’s the FoxyTunes Planet page on the Magnetic Fields.

I see this as a recognition by Yahoo! Music that the subscription business is tough and that’s its easier to build a business on top of the music and other music related services that are already out there on the web.

The most interesting thing to me is Yahoo!’s new blog music player which is an acknowledgement that mp3 blogging is a big deal. Imagine if that were the first step in building a music service on top of the blogs? Like Hype Machine? Of course, the best thing for them to do is buy the Hype Machine.

But all of this assumes that Yahoo! is going to continue as a stand alone entity which doesn’t seem that likely right now.

#My Music#VC & Technology

Comments (Archived):

  1. RacerRick

    Yahoo lucy–charlie-brown-football-ed me on this one.Long time Music Match customer. Yahoo buys em, does nothing with it for 2 years then out of no where (crapily) migrates all the customers to Yahoo music.Now they shut down yahoo music. Screwed twice.

  2. Matt_

    I think this has more to do with Yahoo not wanting to deal with the hassle of DRM anymore .Ian Rogers Yahoo Musics General Manager has been a very outspoken critic of DRM in the past and DRM has also eaten into Yahoo Music’s operational costs with DRM being the cause of most of Yahoo Music’s customer service issues . Ian Rogers wrote on his Personal Blog about his thoughts on DRM last year…Also the acquisition of Foxytunes demonstrates that Yahoo doesn’t wast to develop a stand alone media player anymore and is more interested in web based services ,

    1. bsiscovick

      Speaking of Ian Rogers, I wonder how this move will impact him. I am a big fan of his forward-thinking approach…

      1. fredwilson

        Me tooBut good people end up in good placesfred

  3. James

    Just wondering. Why would you propose Yahoo buying Hype Machine- when later in the day you admit that innovation has been less than stellar for start-ups post Yahoo acquisition:”I suspect that many of Yahoo!’s best services will languish under Microsoft’s ownership and that users will leave. It’s happening already under Yahoo!’s ownership to services like Flickr and Delicious and MyBlogLog.”

    1. fredwilson

      Good pointit seems like where they are headingFred

  4. Lucas

    Hi Fred,FYI, the new build of the music player with the improvements I mentioned is now up. See… for details.thanks.-Lucas Gonze

    1. fredwilson

      Thanks for pointing it out LucasI’ll post something and blog about itfred