Yahoo cooking up iTunes-like online music service, iPod-like media player

“Yahoo, rethinking earlier plans, is quietly exploring ways to develop a music download service as archrivals Microsoft and America Online place bigger bets on digital song sales,” Jim Hu and John Borland report for CNET “According to knowledgeable sources, Yahoo bought music software developer Mediacode in December to help create a digital jukebox and media player–the key components in many music download services. The Mediacode team includes two founding members of Nullsoft, which created the popular Winamp music player and is now owned by AOL.”

“In addition, Yahoo also has begun kicking the tires of online music services as it rethinks its strategy, which hinges on streaming media, not downloads. For example, Yahoo has held discussions with Musicmatch, one of the largest Internet music services, in what could be a prelude to acquisition talks, according to sources familiar with the meetings,” Hu and Borland report.

“Few analysts expect music downloads to make money anytime soon. Apple Computer, whose iTunes Music Store dominates the market, makes its money on the sale of companion iPod music players and concedes the service is not yet profitable,’ Hu and Borland report. “Still, many large companies, including Microsoft and Coca-Cola, now have plans to offer music downloads. America Online has also joined the game, taking a shortcut by bundling Apple’s iTunes store with its online service. Even RealNetworks, which has bet on subscriptions through its Rhapsody product, recently launched a retail song store.”

“In October, Apple dropped Musicmatch as its software provider for Windows iPod owners, opting to create its own application instead. Since then, Hewlett-Packard also dropped Musicmatch and decided to bundle iTunes with its computers,” Hu and Borland report.

Full article here.


  1. What’s funny is that a lot of people still consider .99 too much money for a single, and somehow think that running a site like ITMS is cheap and easy. Therefore a single should cost maybe .49, in their opinion.

    I’m curious to see what happens to all these corporations who would never have CONSIDERED launching a music site, and now can think of nothing else.



  2. I don’t think there are any plans for an iPod-like device. Mediacode is a software company who may create an iTunes-like player. Correct me if I’m wrong, MDN, but I think your headline is wrong.

  3. Ralph,
    Headline is correct. Quoted from article above, “Yahoo bought music software developer Mediacode in December to help create a digital jukebox and media player–the key components in many music download services.”

  4. I don’t think they’re going to develop a hardware porduct. After all, iTunes is a “digital jukebox and media player”. Maybe MDN sees the word “jukebox” and has flashbacks to the Dell machine.

  5. How can a software company create anything like the iPod. We’re not talking MS here. I just find it interesting that perhaps the phrase “digital jukebox and media player” could be mis interpreted as two products. That’s all.

  6. I’m really curious about AOL. Originally when they announced that they were going to link with iTMS, it was supposed to be only temporary until they got their own service off the ground. I haven’t heard anything about that service for awhile, so I’m not sure if that’s still part of the plan or if they are just going to stick with Apple. If they do come out with their own service, I’m guessing that they would have to stick with AAC, and possibly even FairPlay because otherwise, they would have some very unhappy customers. It would be good for Apple though, because most people would probably rather just stay with what they’ve been using.

  7. Is anyone else having a severe bout of deja-vu here? The words “dot-com” and “bubble” keep popping to mind,
    Every man and his dog is jumping into this, and apart from Apple, it seems nobody knows how to make money out of it. These guys are worse than teenagers when it comes to following trends!

  8. Apple has teamed with AOL, HP, Compaq, Pepsi, and maybe McDonalds. They were the leaders even before that. They are not standing still now, but continuing to develop new features for their portable player and software. Good luck, Yahoo!

  9. SJ should convince Yahoo into setting up an alternative interface for iTMS, where they gets commission from the record labels for sales of tunes from iTMS through their web site. I’m not sure what Yahoo can do to make the alternative interface more attractive to customers. May be on-line music reviews or Yahoo points?

  10. AOL already offers an alternative interface for iTunes, of sorts. iTunes seems to be very flexibly done, probably making alternative access easy when Apple wishes to allow it.

  11. Who’s gonna be next? Starbucks? Sears? How about Home Depot?

    Seems like there is no limit to how many are willing to jump on this overloaded bandwagon.

    Unfortunately, Apple has already left the station without any of them. ;o)

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