Yahoo! Unveils Online Music Service

Yahoo!(YHOO Quote) said late Tuesday that a beta version of a new online music service would be available Wednesday, as the Internet giant moves into the crowded music-by-subscription field.

Yahoo! said its Music Unlimited service would start with an introductory price of just $4.99 a month for an annual subscription or $6.99 on a monthly basis. The service allows consumers to play tunes from a catalog of more than 1 million songs, transfer tracks to portable devices, as well as allow consumers to share music via Yahoo! Messenger.

"We are committed to being at the forefront of the rapidly growing online music segment," said Lloyd Braun, head of Yahoo! Media Group. "Yahoo! Music Unlimited draws on the best of Yahoo! to provide personalization and community features unlike anything else in the marketplace."

Yahoo!'s move to get a piece of the online music market dominated by Apple Computer(AAPL Quote) weighed on its new rivals' shares after the bell: Apple was off 2.3%, while the stock of smaller players perhaps more directly in Yahoo!'s line of fire fared worse; Napster(NAPS Quote) tumbled 20.8% and RealNetworks(RNWK Quote) slumped 11.9%.

Shares of Yahoo! were essentially unchanged after the bell; they rose a penny to $34.07.