Filed under: Deals, Competitive strategy, Microsoft (MSFT), Yahoo! (YHOO), Viacom (VIA)

Yahoo, Inc. (NASDAQ: YHOO), which is going to have an interesting week after last week’s unsolicited bid by Microsoft Corp. (NASDAQ: MSFT), is outsourcing its online music business. Instead of operating its own music download service (which apparently has not been very profitable), the company will give that chore to Rhapsody America, operated by RealNetworks, Inc. (NASDAQ: RNWK) and Viacom, Inc. (NYSE: VIA).

Yahoo! will migrate customers of its in-house music subscription service to Rhapsody in the coming months. With RealNetworks and potential Yahoo! owner Microsoft being bitter enemies, it will be interesting to see if this partnership lasts should Microsoft succeed in taking ownership of Yahoo for $44.6 billion.

Does Yahoo! have the chops to do much outside the email, search and display advertising arenas? It has not seen growing profit despite being the world’s largest internet property (until recently), but shedding itself of assets like its online music business is in line with the company’s recent turns as it concentrates on core businesses and trying to be everything to everyone — and making money from just a few pieces of its business.

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This entry was posted on Monday, February 4th, 2008 at 5:19 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.