AOL and EMusic get chummy on downloads

World's largest ISP is putting its money on the controversial MP3 music format.

AOL has signed a three-year deal with EMusic -- formerly GoodNoise -- that will allow AOL members to buy and download music from the Net.

The deal will see the ISP joining the ever-growing stream of converts to the digital formula that remains the bete noir of the recording industry. EMusic has become one of the biggest distributors of MP3 on the Net and has a catalogue of over 20,000 songs in the format.

Under the terms of the non-exclusive agreement, EMusic will pay AOL a fixed marketing fee as well as a share of transaction revenues. EMusic will develop co-branded sites with AOL's ICQ, Spinner and Winamp services and both will cross-promote downloadable music through links, Web advertising and other marketing initiatives.

"This deal is about providing content -- keeping existing members and attracting new ones," an AOL spokeswoman said. While nothing has been agreed, she admitted AOL is considering similar deals with other digital music distributors.

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