Digital Home Thoughts: Yahoo! Buys Musicmatch for $160 Million

"The Sunnyvale, Calif.-based company said the buyout would help it expand its presence in the simmering online music space, where Apple Computer's iTunes service has proven the segment's potential by selling over 125 million songs, typically at 99 cents apiece. Founded in 1997, Musicmatch markets digital music software, dubbed Jukebox, and maintains a download service that boasts over 225,000 subscribers. Included in those numbers are customers of Musicmatch On Demand, a subscription service that offers streaming music, and the company's online music download store. Musicmatch, which is based in San Diego, says that approximately 700,000 songs are available through its online catalog. "Yahoo is committed to being a major player in digital music," Terry Semel, chief executive of Yahoo said in a statement. "This combination bolsters our strategy to capture the largest audience of consumers as they make the shift to digital music." "

Taking a page from Google, Yahoo has gone out and bought Musicmatch. We have all been reading about possible suiters for Musicmatch (Sony, AOL, Microsoft) during the past few months, but none were able to to complete the deal. Yahoo has now vaulted into the limelight of online music sales, and the combination of Musicmatch and LAUNCH should strengthen Musicmatch.

Will Napster be able to go it alone now or are they the next company to be purchased?