Yahoo today tilted the balance of digital music by announcing that Yahoo Music would switch to RealNetworks' Rhapsody for its on-demand music, replacing the Yahoo Music Unlimited service for subscription services. The move will see existing Yahoo subscribers transition over to Rhapsody accounts over the next several months, beginning mid-year, and will make Yahoo's music services accessible from devices which were previously limited to the Real service; devices such as Logitech's Squeezebox media streaming hub and TiVo recorders will now have access to Yahoo's services. Both companies also plan to collaborate on a la carte downloads in the future.

Additionally, Yahoo has announced that it has acquired FoxyTunes, a company responsible for a browser plugin that controls playback of both offline and web-based media players. The feature will let Yahoo offer a more open music playback experience, according to the company.

The decision comes just as Yahoo is said to be evading a Microsoft buyout by investigating deals with other companies. Yahoo's music subscription service has until now been dependent solely on Microsoft's protected Windows Media format to offer unlimited downloads but now has access to Real's music format, reducing Yahoo's overall dependence on Microsoft.

Yahoo has also recently expressed its desire to offer permanent downloads in an unrestricted MP3 format, allowing interoperability not possible with either Microsoft's or Real's systems.