Yahoo! buys video-on-demand music site

Yahoo! has bought a US video-on-demand site described by industry watchers as 'the MTV of the internet'.

The deal for Launch Media is estimated to be worth $12m cash plus $3m in debt financing.

Ellen Siminoff, Yahoo's senior vice president of entertainment and small business, said entertainment content is becoming an increasingly important part of Yahoo's offering.

She said in a statement: "Launch Media possesses a large audience, a seasoned team of music industry veterans, and the broadest array of music and music-related content available on the web today. These strong core assets will enhance Yahoo!'s current entertainment offerings and strengthen our leadership position in this space."

Launch Media simultaneously announced that it has settled a long-running dispute with recording giant Universal Music Group, which was suing the firm for copyright infringement on its LaunchCast internet radio service.

The settlement involves Launch Media making a payment for past use of UMG content, as well as an ongoing deal for future broadcasts.