Yahoo in online music acquisition talks

Internet giant Yahoo is rumoured to be close to acquiring online music provider Myplay, which provides a service similar to the controversial My.MP3.com.

US reports suggest that the price may top $200m, and officials from both Yahoo and Myplay declined to comment on the speculation.

Myplay lets people store, play and share their music collections online. Users can transfer up to 3Gb of digital music, including their own, to an online 'locker'. The playlists can then be emailed to friends.

Yahoo had previously expressed an interest in Myplay, but an existing agreement between Myplay and service provider America Online could throw up some last-minute complications.

Rob Enderle, an analyst at Giga Information Group, said companies negotiating acquisition deals must ensure that they are not violating the contract terms of previous agreements.

Myplay was launched in October 1999 and provides an alternative to MP3.com's My.MP3.com service, which a US judge recently ruled was liable for copyright infringement.

The My.MP3.com website allows users to store and download their own CD collections. Copyright law permits the owners of CDs to create MP3 files from the CDs for personal use, but prohibits transfers of those files.

Myplay completed a round of financing totalling more than $18m last month, led by Vulcan Ventures, the investment arm of Microsoft co-founder Paul Allen.