Yahoo! to Promote Universal-Sony Music Service

French media giant Vivendi Universal said its online music alliance with Japan’s Sony Music Entertainment, Duet, is entering into a nonexclusive marketing partnership with U.S. portal Yahoo! Inc.

Under the agreement announced Thursday, Santa Clara, Calif.-based Yahoo (YHOO) will steer visitors to Duet, a subscription-based music service.
The service is expected to launch in the summer with streaming music, with plans to add downloading in the near future.

The on-demand Duet subscription service will offer consumers the opportunity to access a broad range of music online while respecting artists’ rights, the companies said. Other online services, such as Napster Inc., have run afoul of the music industry because of copyright issues.
The Duet service also will provide customers with the ability to compile personalized playlists and to share them with other Duet members, among other features.

The Duet subscription service will offer music from Sony Corp.’s (SNE) Sony Music and Universal Music on a nonexclusive basis. Duet also expects to offer music from other companies.

The deal follows Microsoft Corp.’s (MSFT) announcement Wednesday that it is making its first foray into online music by offering a a free Web-based service that is designed to help consumers discover new songs and artists.
Microsoft’s announcement cames two days after the announcement of MusicNet, a new joint venture of AOL Time Warner Inc. (AOL), Bertelsmann AG, EMI Group PLC, and RealNetworks Inc. (RNWK). The new company plans to provide technology and licensed music to others seeking to sell downloaded music through paid subscriptions.

Separately, Lehman Brothers analyst Holly Becker raised her investment rating on Yahoo shares to “buy” from “market perform.”

Ms. Becker said the shares have fallen enough to make them attractive again and that financial estimates for Yahoo! have also come down enough to make the stock a buy.
The analyst also said her 12-month price target is $20.
“Much has changed in recent months: estimates have again come down, we are beginning to see management changes and the stock is down another 71% from its 2001 high,” Ms. Becker wrote in a synopsis of her research note Thursday. “We now ask ourselves again is it time yet? WE THINK IT IS!”

Like many other companies that rely upon online advertising for revenue, Yahoo! has been battered by the dot-com shakeout. Its shares hit a 52-week high of $171.25 in April 2000 when technology stocks were still riding high.
In morning trading Thursday on the Nasdaq Stock Market, Yahoo shares were up $2.75, or 23%, at $15.25.

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