Yahoo Ties Up With CBS To Save Streaming Radio Service

image*Yahoo* has turned to *CBS* to help keep its LAUNCHcast streaming radio service alive. As part of the new partnership, CBS Radio will provide the player and handle the ad sales for LAUNCHcast, and various CBS (NYSE: CBS) stations will be available on Yahoo (NSDQ: YHOO) Music. Yahoo will also incorporate more radio content throughout its news and sports portals. It’s the latest move in Yahoo’s strategy to “completely open” its music operations to other services: the company recently launched an enhanced music search service with Rhapsody (the same company it offloaded its premium music subscription business to in February).

Yahoo started shifting the focus away from LAUNCHcast late last year, plagued by the higher royalty fees that threatened to shut smaller Webcasters like Pandora down. Michael Spiegelman, head of Yahoo Music said CBS came courting at the most opportune time: “We didn’t want to scale down or put up a lot of barriers with LAUNCHcast, but the economics of online radio had changed. It made sense to have a partner like CBS Radio … They’ve made the investment in the infrastructure, the platform and the sales force to operate in a sustainable way.”

CBS Radio’s ad sales expertise is a big plus: it has a 1,600-member sales team, can sell ads on national and local levels, and has a vested interest in TargetSpot, the ad technology firm that can serve hypertargeted ads into various types of streaming media. CBS also has experience with a partnership of this size, as it merged its online radio network with AOL’s back in March.