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"One of the first things Microsoft did when launching the new Zune was kill the two-year-old MSN Music download service." Will it happen again?
If Microsoft's smart, it'll keep LaunchCAST around.
(Credit: Yahoo)
Matt Rosoff says
"One of the first things Microsoft did when launching the new Zune was kill the two-year-old MSN Music download service. The business reasons were plain: MSN Music was a PlaysForSure service, but the Zune wasn't PlaysForSure-compatible and came with its own music download service integrated into the Zune PC software. Sure, there's still something with the brand name MSN Music, but it's basically a shell--a few music videos, some promotional tie-ins with Zune (through a program called Ignition), and a radio station powered by Pandora.
So what might that mean for Yahoo Music if Microsoft's proposed acquisition of Yahoo clears? Probably not much at first. Microsoft's Kevin Johnson, who leads the group responsible for online services and Windows, mentioned in a conference call that the company would get the quickest benefits from combining their advertising platforms, particularly paid search: "scale economics can kick in fairly rapidly when you just look at the simple step of just combining the search-related ad inventory on a single ad platform." Translation: Yahoo Search will be folded into Microsoft's Live Search, and Panama is folded into AdCenter. As soon as the acquisition closes.
Eventually, though, Microsoft will go through all the other Yahoo divisions looking for overlap or strategic misfits. Here's where Yahoo Music could feel the heat. Selling PlaysForSure-protected files does nothing for the Zune, and even if Yahoo goes with DRM-free MP3 files, it would seem to be redundant with the Zune Marketplace. Now, if Microsoft were smart, it would recognize the popularity of the combined Yahoo Music and LaunchCAST, which consistently Aribtron's online radio ratings. But often, decisions in acquisitions are driven by politics and emotion rather than actual business logic."
So microsoft has done it before, but the queston is will they do it again? And this is only a possibility if yahoo says yes to microsoft's offer. If they do in fact do this, I doubt it will affect much people.
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