"Podcasting" -- distributing MP3 audio shows via the Web -- is currently one of the Internet's hippest buzzwords. Apple's (NASDAQ:AAPL) iTunes software added support for podcasts a few months back, and now Yahoo! (NASDAQ:YHOO) wants to get in on the action. The online giant said today that it would beta-test tools to let its community of users easily find, index, and search through their favorite podcasts.

Yahoo!'s new service will be called -- not surprisingly -- Yahoo! Podcasts. Its directory allows users to search through podcasts by keyword, categories, or user-created tags. It also includes user reviews and ratings, as so many online content providers do, along with tools to let users create their own podcasts.

Intriguingly, users of Yahoo!'s service can listen to podcasts directly on the Web; unlike iTunes, there's no software to download. However, if people want to subscribe to podcast content or transfer it to their own music players, they'll need Microsoft's (NASDAQ:MSFT) Windows Media Player, Real Networks' (NASDAQ:RNWK) RealPlayer, or Yahoo!'s own Music Engine.

Much like blogs, podcasts represent a brand-new type of content that has caught on with many Net-savvy individuals. Although statistics on overall podcast listenership have been sketchy so far, some market researchers see a bright future for the genre. Diffusion Group predicted in July that the podcast audience will burgeon to 56 million by 2010. However, not all researchers are so upbeat; Forrester only believes 12.3 million people will be tuned into podcasts in that same time frame.

Whether podcasts really catch on or turn out to be an electronic fad, Yahoo!'s foray into podcasting may be fairly futile if Apple continues to dominate the market with iTunes and its currently ubiquitous iPod music player. Nonetheless, podcasting has attracted enough interest that media companies like Yahoo! must address it. Given Yahoo!'s traditional strength in portal content, it would probably seem remiss for the Internet giant to miss the ball on this one. Besides, it's refreshing to see Yahoo! take on someone other than Google (NASDAQ:GOOG), for a change.

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Alyce Lomax does not own shares of any of the companies mentioned.