Yahoo to see Spotify integration; distribution deal signed

Yahoo and Spotify pen a new deal that sees Yahoo Music bolstered by Spotify's streaming service. Will the deal save Yahoo? And what will Spotify get out of it?

Yahoo and Spotify have signed a distribution deal that will see Yahoo Music integrate Spotify, as the former Web portal giant sets its sights on reinvigorating the company's image.

Earlier this year, music streaming service Spotify rolled out its "play" button outside the four walls of Facebook where it previously called home.

Now it's taking on Yahoo in a bid to bring music to around 700 million users worldwide.

The new distribution deal will see Spotify's "play" button initially on Yahoo Music, and will roll out later to other Yahoo properties. The button will only work should users have Spotify installed on their machine --- as is the case still with Facebook and every other "play"-enabled site.

Yahoo said the deal was designed to "drive deeper user engagement" for both companies, but it's not easy to see which company will benefit more.

Spotify seeks to boost its 10 million active user base and to boost its profitability in the face of its main competitor Pandora, while Yahoo struggles to redefine itself as a "media company" following its pushing aside during the mid-2000's when all the cool kids like Facebook and Twitter arrived at the party.

When Yahoo sends Spotify new customers and paid subscribers, Yahoo will see a slice of revenue generated --- though neither company will explain how this will happen.

With the doom and gloom from the revolving door of chief executives, this smidgen of positive public relations may be what interim CEO Ross Levinsohn needs to secure his place in the company's top spot.

If the Spotify deal works out, solidifying Yahoo's bid to rebrand as a media content provider, it may just save the company's well-crafted behind for another day.

Image credit: Sarah Tew/CNET.