Rising royalties send Yahoo's Launchcast to CBS

Yahoo Inc. is plugging its Internet radio service into CBS Corp.'s webcasting network in a move driven by dramatically higher fees for airing music online.

Yahoo (nasdaq: YHOO - news - people )'s retreat from operating a standalone service, announced Wednesday, makes it the second major Web site this year to flee the rising royalty rates by hitching its radio operations to CBS (nyse: CBS - news - people ). AOL Radio, owned by Time Warner (nyse: TWX - news - people ) Inc., hooked up with CBS in June.

Yahoo's radio channel, called Launchcast, will combine with CBS beginning in February.

The shift broadens Yahoo's retrenchment from online music. The company closed a music downloading service and transferred its music subscription service to RealNetworks Inc. (nasdaq: RNWK - news - people )'s Rhapsody earlier this year.

Under the latest arrangement, Yahoo will depend on CBS Radio to power Launchcast and sell all the ads on the service. Yahoo employees will still oversee the programming for Launchcast's roughly 150 stations, drawing from CBS Radio's content.

In return for the helping hand, Yahoo's highly trafficked news and sports sections will feature some of CBS's top-rated radio stations, including WFAN in New York and KNX-AM in Los Angeles.

The combination also will widen Launchcast's audience by enabling users to listen to the service through the Firefox and Safari Web browsers for the first time. Launchcast's player has worked only with Microsoft Corp. (nasdaq: MSFT - news - people )'s Internet Explorer.