Yahoo Music and Rhapsody Networks are live with the latest example of their partnership: full tracks served up with Yahoo U.S. search results. For instance, search for Bruce Springsteen and the top unsponsored result is a search box with links to five tracks; pick one and the FoxyTunes player pops up near the bottom of the browser. The music kicks right in. Browsing can continue and you can even use other screens. The catch: unless you’re a Rhapsody subscriber, full-stream play is limited to 25 songs a month.
According to Peter at Silicon Alley Insider, Rhapsody pays Yahoo! for each subscriber signed up through this service.
So, Yahoo! makes money from search ad clicks and referral payments from Rhapsody. Rhapsody pays the royalty on streamed songs and hopes to make money from new subscriptions.
Since I don't think this service will convert many users to Rhapsody subscribers, Yahoo! will make whatever money it does make, from advertising.
There are however two self-destruct features built in to the service. The first time a user hits the 25 play monthly max will be the last time he uses the service - he just won't trust it again. Second, since Rhapsody won't sign up enough subscribers to even cover their costs they will pull the plug on this soon.
Nice little feature, but like other music discovery services - not likely to last very long or make much money for anybody.
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