|News May 12, 2005
With an aggressive pricing strategy and years of brand recognition, Napster and Real will be hard-pressed to face the Yahoo machine.
The company started as the brainchild of a couple of Stanford grads, who felt the nascent World Wide Web needed a little navigational organizing. They created Yahoo! and offered
visitors two columns of web site categories where people could find sites of interest.
Today, Yahoo offers a well-known portal to a host of other web services. E-mail, instant messaging, and lots of content on sports, entertainment, and other topics. Instead of being a
labor of love, the company brings in revenue from a variety of advertising options. And as the company grows, it develops more services.
Music Unlimited comes along as the latest offering in the Yahoo portfolio. It is a digital music subscription service, similar to Napster and RealNetworks' Rhapsody. For a monthly fee,
users can stream music to their computers and optionally carry it with them on portable music players.
Where Yahoo makes its biggest impact will be the pricing department. A year of Yahoo Music costs less that $60, about a third of what Napster and Real charge. Yahoo has a lower price
per song for those who want to burn music to CD, at 79 cents per track.
The market responded predictably to the news. RealNetworks shares fell $1.54, or 21 percent, to $5.76. Napster fell $1.70, or 27 percent, to $4.65. Even Apple, purveyors of the popular iTunes
Music Store, may have been affected by the news, falling 81 cents to $35.61. Yahoo enjoyed a rise of 82 cents to $34.88.
Apple can have some say on the success of Yahoo's music service. Yahoo doesn't support AAC encoding, which is the format for songs that are destined for an iPod. Instead,
Yahoo songs will have Microsoft's digital rights management technology, called Janus in place.
The iPod has become an iconic fixture in society, and not supporting the devices directly will keep a few customers away. But one change Apple can make, but has resisted doing, would be
to offer a subscription service of its own. The Cupertino company has been content to let iTunes drive sales of the iPod.
Yahoo's new service only supports a dozen digital music players currently, none below $199. They will have to persuade companies like Creative to add support for Janus to their
lower-cost players to really achieve gains on Apple.
|About the Author:
David Utter is a staff writer for WebProNews covering technology and business.
I cannot believe how many people sent me the news that Google has bought Dodgeball, an SMS meetup service.
first off thank you Nicholas, Justin, Derrick and Wayne.
It makes more sense if you set it to music.
Dodgeball is a social networking service for mobile phones. Users sign in on their phones and notify the service where they are, which then lets
friends know which friends are in the area. Basically, it lets you navigate your social scene. BoingBoing called it "social software for mobile phones". Basically, the killer app for
Dodgeball is signing in, finding out your friend Joe has a friend Wendy who is at a newsstand two blocks away, and walking up to her and saying "I didn't know people actually named their kids
Alex and Dennis of Dodgeball say in the their members that they are
excited to now have the resources to make the service bigger. One can only wonder what Google's plans are for the service.
|About the Author:
Nathan Weinberg writes the popular InsideGoogle blog, offering the latest news and insights about Google and search