Yahoo and Spotify announced a global content distribution and promotion agreement, a deal which eliminates Rhapsody as Yahoo’s on-demand music partner.

Visitors to the Yahoo Music site can use Spotify while remaining on Yahoo as of today. Soon Spotify will roll out across the rest of Yahoo’s Media Network, sites and services that collectively reach nearly 700 million unique users monthly.

To increase engagement further, the companies are developing a Spotify app specifically for Yahoo that will integrate relevant original content to create a more complete experience.

“At Spotify we want to light up the web with music and as Yahoo’s global music partner we’re able to reach their massive audience,” said Daniel Ek, Spotify CEO and founder.

Yahoo was an early pioneer in online music offerings, a strength that included boosting Mark Cuban’s fortunes way back in 1999 by purchasing his in a deal valued at $5.7 billion. Yahoo also acquired other innovators like Launch Media and Musicmatch before apparent neglect set in.

“Delivering compelling premium experiences across screens is core to our mission at Yahoo. Spotify is the leader in the digital music field and together we can provide the ‘soundtrack’ for users around the world,” said Ross Levinsohn, interim CEO, Yahoo. “What Daniel and his team are doing is changing an industry, and we’re thrilled to be partnering with them.”

Related links:

Yahoo and Spotify – press release

Associated Press – Yahoo teams up with Spotify for on-demand music

All Things D – Yahoo Sings Along With Spotify — And May Profit, Too

TechCrunch – A New Chapter For Yahoo Music: A Deal With Spotify, Replacing Rhapsody

Photo by Flickr user kin.lane, used under Creative Commons license