It's easy to get lost in the world of digital media, but Yahoo! (Nasdaq: YHOO ) knows how to rope in an audience. With all the hype about Google (Nasdaq: GOOG ) , Amazon.com (Nasdaq: AMZN ) , and the like, the original search master has had to find new ways to stay above the fray. And it has, coming out with news feeds and a publishing network, narrowing the innovation gap with Google. But now, Yahoo!'s gone above the G-standard by broadening its searches and coming out with a music download service.
After a recent expansion, Yahoo! announced that its search engine index now covers more than 20 billion "objects." So is Google out of the water? Not hardly. Up until a year ago, Yahoo! had been licensing Google's search results, which definitely helped in Google's mission to become the information search leader. Even now, other websites, including newspapers as well as corporations, use Google as their search index. According to comScore Networks, Google had a 36.9% share of the U.S. search engine market at the end of June, with Yahoo! a close second at 30.4%. But Yahoo!'s looking to drive the stake even deeper with its new Yahoo! Audio search function and Music Unlimited jukebox.
The company has stated its intent to become "a major player in digital music." Well, it certainly took long enough, almost one year after announcing plans to acquire digital music software maker Musicmatch. But once Yahoo! got going, it steamed ahead. Along with its Audio search, where users can store their searches on Yahoo!'s My Web 2.0 using RSS feeds, the company today made widely available its Music Unlimited (non-beta) application. For $4.99 a month (on an annual subscription basis), you too can download more than a million songs. This fee is almost half the price of similar services offered by Napster (Nasdaq: NAPS ) and Rhapsody from RealNetworks (Nasdaq: RNWK ) . And you can get started with a free seven-day trial. But what's the catch? Subscription-downloaded tracks expire when your subscription expires. So to keep accessing your tracks, you need to pay the standard $0.99 a song and download it individually. And, after reading through much fine print, you realize that these songs are not compatable with the iPod because they are downloaded by Yahoo! in Windows Media Audio format.
Although Yahoo! is fulfilling its promise to get into digital music, I can't help but wonder whether Apple (Nasdaq: AAPL ) is doing it better. Apple already has 1.5 million songs in its iTunes jukebox (and has sold over 500 million!), and Yahoo! has just about 1 million. But, at the very least, users can use the Yahoo! music service to check out a huge variety of songs (think: all the time you wasted in college) for a moderately low price before making the songs a more permanent part of their collections. Yahoo!'s pulling out all the stops for Music Unlimited, with what it calls a "Huge" multimedia brand-building campaign during the MTV Video Music Awards -- definitely a good way to get in with the non-iPod Generation Y crowd.
The company continues to make strides as it adds popular functionality to its traditional search engine. Yahoo! seems to have several tricks up its sleeve, but the question is, will they be enough? Branching out into niche markets seems a good way to pull even with the Google domination and keep this search engine chugging. But can someone please tell this train to find new names for its stations?
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Shruti Basavaraj is a Motley Fool financial editor. She gets her groove on to all sorts of music, but owns no shares of any company mentioned above.
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