Yahoo! Takes Center Stage With Music

The major record labels have fought tooth and nail against all efforts to harness the Internet's power in bringing music prices down to earth. But Yahoo! is bringing to the table a very compelling bargaining chip in the form of social networking technology, which allows a community of users to find and share new music with each other.

Subscribers to Yahoo! Music Unlimited can use the personas they create in Yahoo! Messenger, or on personalized homepages that Yahoo! is starting to set up for them, to post playlists of favorite songs or lists of favorite artists. Yahoo! can use data-mining technology to suggest new artists they may like, based on music interests of other members who share similar tastes. The site can also introduce them to new people who share their tastes in music.

This sounds useful for music lovers, but how does it help the labels? First off, they can discover promising new acts by tracking which bands or artists are developing a cultlike buzz among music lovers. More important, they can target their own advertisements to music lovers based on highly tailored demographic data that Yahoo! collects when members enter data about themselves.