Yahoo! on Tuesday announced a joint venture with Spotify that will enable the search engine company to integrate the on-demand music service into its Media Network. According to Yahoo!, this network reaches nearly 700 million unique users monthly -- over 47-percent of the total worldwide Internet audience. That's a lot of exposure for Spotify to say the least.
According to Yahoo!, Spotify's streaming music will initially roll out to Yahoo! Music, replacing Rhapsody. Later the service will be contextually integrated globally across the rest of Yahoo!, including Yahoo! Movies, omg! and its other leading entertainment sites. In turn, Yahoo! said it will create an app for Spotify's platform featuring Yahoo! original entertainment content, which will reach Spotify's more than 10 million active users.
"Delivering compelling premium experiences across screens is core to our mission at Yahoo!. Spotify is the leader in the digital music field and together we can provide the 'soundtrack' for users around the world," said Ross Levinsohn, Interim CEO, Yahoo!. "What Daniel and his team are doing is changing an industry, and we're thrilled to be partnering with them."
Essentially what this means for Yahoo! users is that they will see Spotify play buttons, but they will only be able to listen to the music if a Spotify account is in place, and the Spotify client is downloaded and installed. However as Yahoo! specified, the company will program a branded app that will show up within Spotify's software later this year offering remium original content from artist profiles to musical programs.
Yahoo strategy SVP Jim Heckman said that the deal with Spotify will bring a new string of revenue, as the search engine company will get a cut from each new subscriber. Ad revenue will not be shared. "We’re participating in providing content, and we’re participating in revenue as well," he told AllThingsD.
Tuesday's news is a definite sign that Yahoo! remains committed to its content services, as it has picked what's currently considered the best of its class in music streaming thus far. Spotify also has close ties with cash cow social network Facebook which could possibly add to Yahoo!'s search engine traffic over time.