Yahoo unveils music service in the US
Music stocks hit a low note Wednesday after Yahoo! Inc. unveiled its new online music subscription service and drastically undercut the prices of the current industry leaders.
"Yahoo! Music Unlimited" allows consumers to download an unlimited number of songs onto their portable MP3 players for $60 annually.
Yahoo!'s (Research) new online subscription music service is a direct challenge to such rivals as Apple Computer Inc. (Research), Real Networks Inc. (Research) and Napster Inc. (Research).
Apple shares fell over 3 percent on the Nasdaq, while RealNetworks shares plunged 22 percent.
Shares of Napster sank over 30 percent in trading on the Nasdaq. The company will post fiscal fourth-quarter earnings after the bell; analysts, on average, expect the company to report a loss of 63 cents a share according to First Call.
Yahoo! shares edged higher.
In separate news, Warner Music Group Corp. (Research) shares fell more than 7 percent in their market debut after the record company's initial public offering raised a less-than-expected $554.2 million.
Late on Tuesday, the record company's 32.6 million-share IPO was set at $17 per share, which was far below its estimated range of $22 to $24 per share.