Goodbye Rhapsody, Spotify & Yahoo! Announce Major Global Deal

(UPDATED) Spotify and Yahoo! have cut a global content distribution and promotional deal that embeds Spotify’s on demand music service across the Yahoo! network of sites. It's a major deal for both companies – Spotify gets access to Yahoo!'s 700 million unique users monthly and Yahoo! gets a a music service again, after gutting their own over the last several years.

Rhapsody had been available to Yahoo! customers. But now Spotify will roll out its Play button, first to Yahoo! Music and later integrating globally across the rest of Yahoo, including entertainment sites Yahoo! Movies and OMG. In turn, Yahoo will create an app for Spotify’s app platform that delivers music and entertainment content to Spotify's 10 million users.

Spotify's Facebook partnership has driven rapid growth for the music streamer. The Yahoo deal should only accelerate it further.  Yahoo, in addition to giving users another reason to spend more time on their sites, will also see a share of revenue as some switch from free to paid.