Yahoo Buys Musicmatch for $160 Million

Yahoo and Musicmatch today announced they have signed an agreement for Yahoo to acquire Musicmatch for approximately US$160 million in cash.

According to Jupiter Research, digital music sales are expected to grow rapidly in the near future, particularly with the increasing availability of broadband access.

Music subscription sales, for example, are expected to grow from $113 million this year to $890 million in 2009, while digital downloads are anticipated to reach $803 million in 2009, compared to $158 million for 2004.

“Yahoo is committed to being a major player in digital music,” said Terry Semel, chairman and chief executive officer of Yahoo.

About Musicmatch

Founded in 1997, Musicmatch was one of the companies that helped pioneer digital music management technology.

The company’s assets include Musicmatch Jukebox software, the online Musicmatch Radio network and the Musicmatch Music Store song download service, which offers access to more than 700,000 tracks.

Most recently, the company introduced the Musicmatch On Demand streaming music subscription service, providing access to more than 700,000 songs from any computer.

The Musicmatch Jukebox software is available in ten languages, including Spanish, French and German.

Increasing Yahoo’s Reach

The combination of the two companies should increase Yahoo’s music reach from 12.9 million to an estimated 23 million listeners.

“Our goal is to give consumers the music they want, how they want it, anywhere they want it,” said David Goldberg, vice president and general manager of music at Yahoo. “This acquisition also gives Yahoo a strong position in the digital music business, in both ad-supported media, such as radio and music videos, and on-demand distribution, with subscriptions and downloads.”

Upon completion of the acquisition, Musicmatch will become a wholly-owned subsidiary of Yahoo.

The transaction is subject to customary closing conditions, including regulatory approval. It is expected the transaction will be completed during the fourth quarter of 2004.

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