Posted February 4, 2008 6:05 pm by with 7 comments

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Yahoo Music has been reported to be struggling for a long time. As the anti-climatic 100 days came to a close, we began hearing rumors that Yahoo Music’s 300 employees would face the first round of layoffs. Just weeks ago, Yahoo launched a web-based MP3 player, but it just wasn’t enough to keep the money rolling in.

While the free portions of Yahoo Music will continue to work, Yahoo Music is losing its paid subscription service. As of today, they are supposed to redirect traffic to their paid service to Rhapsody.

The switch may not directly indicate that the service was unpopular—the AP reports that the switch is part of deal with Rhapsody’s owner, RealNetworks. As users are shifted, there will be a brief period where current subscribers will be allowed to pay Yahoo’s lower premium rates ($5.99 to $8.99 per month) before being phased into Rhapsody’s system ($12.99 per month).

So, instead of directly indicating that Yahoo Music couldn’t survive on its own, the switch does lead us to the same final conclusion. Surely such a deal was only inked by a Yahoo that realized its music service was not ultimately going to be a successful venture.

The announcement, of course, is poorly timed, making Yahoo look weak and reminding us of past failures just as they are contemplating Microsoft’s bid.

  • Zen

    What role does Apple’s iTunes play in all of this?

  • IMHO more important influence of Russian mp3 stores with their cheap prices.

  • Something should be done about the Yahoo music fast.

  • Yahoo has music? I guess I never saw Yahoo as my destination when looking for music. Maybe I’m not alone considering the news.

  • I’m surprised Yahoo Music didn’t go down sooner with everyone using iTunes. Yahoo seems to be losing market share in all markets… who is running the show over there?

  • iTunes and yahoo music are two different animals. Doesnt Yahoo music only offer streaming music?

  • I too did not meet on yahoo of music earlier