Yahoo will acquire Musicmatch, a provider of personalized music software and services, for approximately $160 million in cash. Yahoo currently has a music destination called "Launch" (http://launch.yahoo.com), which provides streaming audio, music videos, exclusive artist features and music news, in addition to LaunchCast Internet radio.

"Yahoo is committed to being a major player in digital music," said Terry Semel, chairman and chief executive officer of Yahoo Inc. "This combination bolsters our strategy to capture the largest audience of consumers as they make the shift to digital music and supports Yahoo's goal to give consumers the greatest choice, control and flexibility in how they interact with their music. This acquisition is one of several product innovations and new initiatives in which Yahoo! will invest to build our music portfolio this year and in the future."

Founded in 1997, Musicmatch offers Musicmatch Jukebox software, which allows consumers to play, burn, download, discover, and organize an entire music collection; the online Musicmatch Radio network; the Musicmatch Music Store a la carte song download service, which offers access to more than 700,000 tracks; and the Musicmatch On Demand streaming music subscription service. The Musicmatch Jukebox is available in ten languages, including Spanish, French and German.

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.

eBay is currently testing music digital downloads on its site. eBay's pilot program in the Music category is limited to pre-approved sellers of downloadable digital music files.

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