Yahoo! Making Beautiful Music?

Remember that $160 million Yahoo! (Nasdaq: YHOO  ) spent to acquire Musicmatchlast year? The deal was to bear fruit this week with the launch of a rival digital music store to Apple's (Nasdaq: AAPL  ) iTunes. But, according to a News.com story posted yesterday, the debut has been delayed. News.com cites sources that say the store could go live as soon as the end of the month.

The delay may be disappointing to some waiting for a viable challenger to iTunes. But let's be honest, Fools. Even if Yahoo! were to delay six months and create a perfectly seamless listening experience, the so-called Yahoo! Music store is unlikely to do anything to slow iTunes' march. And that's because of the crushing popularity of the iPod.

The News.com story disagrees with my assessment because Yahoo!'s Launchcast radio service was the highest-rated webcasting service online during January, attracting more than 2.2 million people. And that data comes from no less than ratings firm Arbitron (NYSE: ARB  ) and researcher ComScore Media Metrix.

I'll grant the webcasting number is impressive, but so is this: iTunes has now sold more than 300 million downloads. And consumers have bought more than 10 million iPods from Apple. There's plenty of headroom left for iTunes, and growth appears to be accelerating.

In the end, Yahoo! Music isn't really any different from Microsoft's (Nasdaq: MSFT  ) MSN Music and Napster (Nasdaq: NAPS  ) . Sure, it will take advantage of the highly prized real estate Yahoo! has carved out on the Web. And, yeah, that will give millions of potential users access to the new jukebox. But people are buying iPods and using iTunes to manage their rhythmic collections. It's really that simple. Indeed, when it comes to the music downloading biz, Yahoo!'s other digital properties are likely to be about as helpful as a landfill is to a homebuilder. In other words: Not at all.

For related Foolishness:

  • Yeah, we know, you love your iPod Shuffle. Just don't eat it.
  • Yahoo! isn't the only one nipping at iTunes' heels.
  • Even virgins are tempted by Apple's success.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile, which is here. The Motley Fool has a disclosure policy.


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