Yahoo! to Acquire Launch Media for $12 Million

By Chris Frankie ,

Yahoo!

(YHOO)

agreed to acquire

Launch Media

(LAUN)

, a company that offers music and editorial content on the Internet, for about $12 million.

Yahoo! will initiate a cash tender offer to acquire Launch Media's shares for 92 cents each. The company expects to complete the deal in the third quarter. Launch Media's operations will continue to be based in Santa Monica.

"The addition of Launch's enormous music video collection and Internet radio service to Yahoo!'s existing entertainment offerings will create even more compelling opportunities for online music fans, established and new artists, and advertisers," the company said in a statement.

Launch also said it has settled a copyright infringement suit brought by

Vivendi's

(V) - Get Report

Universal

and others in connection with the company's Internet radio service, Launchcast.

Shares of Yahoo! gained 4.1% to $19.55, while Launch was up 53.5% to 89 cents in recent

Nasdaq

activity.

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