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According to early reports, the iPod Touch was a hot seller over the holidays. At the same time, sales of the mighty iPhone have been slowing in some places. Is there a connection between the two?

BusinessWeek says the Touch’s good fortune is partly a matter of economics and partly its functionality. While the iPod Touch is priced from $229 to $399, it is more affordable than the iPhone, as consumers aren’t saddled with a pricey monthly phone plan.

Plus, with the growing number of games on Apple (nasdaq: AAPL - news - people )’s App Store, the iPod Touch is presenting buyers with an alternative to a Nintendo (other-otc: NTDOY.PK - news - people ) DS or Sony (nyse: SNE - news - people ) PSP.

Kleiner Perkins Caufield & Byers partner Matt Murphy, who manages its $100 million iFund for App Store developers, told BusinessWeek that aside from the Touch becoming a “legitimate gaming platform,” young people are using it for social networking and other applications. He added that for some people, “it’s becoming a computer replacement.”

BusinessWeek also references a note from BMO Capital Markets analyst Keith Bachman that found Canadian telco Rogers Communications (nyse: RCI - news - people ) sold 130,000 iPhones in the December quarter, significantly lower than 235,000 in the previous quarter. We won’t know the latest iPhone sales numbers in the U.S. until AT&T (nyse: T - news - people )’s latest earnings are released in at the end of the month.

Another interesting datapoint on the rising popularity of the Touch comes from mobile ad network AdMob. Its has released December figures Thursday, and while our usual caveat that these figures are from only one vendor still stands, they show a jump in the number of ads it served up to iPod Touch users—from 86 million in November to 292 million in December. The requests doubled overnight on Christmas, and remained strong throughout the close of the month.

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.