Yahoo, Inc. (NASDAQ: YHOO), which is going to have an interesting week after last week's unsolicited bid by Microsoft Corp. (NASDAQ: MSFT), is outsourcing its online music business. Instead of operating its own music download service (which apparently has not been very profitable), the company will give that chore to Rhapsody America, operated by RealNetworks, Inc. (NASDAQ: RNWK) and Viacom, Inc. (NYSE: VIA).

Yahoo! will migrate customers of its in-house music subscription service to Rhapsody in the coming months. With RealNetworks and potential Yahoo! owner Microsoft being bitter enemies, it will be interesting to see if this partnership lasts should Microsoft succeed in taking ownership of Yahoo for $44.6 billion.

Does Yahoo! have the chops to do much outside the email, search and display advertising arenas? It has not seen growing profit despite being the world's largest internet property (until recently), but shedding itself of assets like its online music business is in line with the company's recent turns as it concentrates on core businesses and trying to be everything to everyone -- and making money from just a few pieces of its business.

As the living room of the future converges (after years...decades of hype), it's no wonder that Microsoft Corporation (NASDAQ:MSFT) and Apple Computer, Inc.(NASDAQ:AAPL) want a large slice of that pie. You know, the pie that makes it easy to get that torrent of content from your PC or computer room to the living room TV and audio system?

Other competitors, though, are not sitting still. Scrappy players like RealNetworks(NASDAQ:RNWK), founded by a former Microsoft alum, and TiVo(NASDAQ:TIVO), the "DVR" company, digital video recorder, wants to push its content to you. TiVo's "TiVoToGo" service has let PC users take DVR content from their TiVo boxes onto laptops and other computers for quite some time -- while even allowing DVD burning. RealNetworks has a music download service called "Rhapsody" that competes with Apple' s iTunes, Microsoft's Zune store and other services like Yahoo! Music and Napster.

It seems natural, then, for a digital music service like Real's Rhapsody to partner with another content management pioneer like Tivo and Nokia (NYSE:NOK) to ensure that RealNetworks can "get off the PC" and into digital music players, living-room DVRs and other hardware where customers want to enjoy their content. Microsoft and Apple are waiting there, though -- the battle may just moving into the pocket or the living room and away from that big beige box we call a PC.

The consumer electronics universe vs. Apple, part (fill in number here). Looks like U.S. consumer electronics retailer, Best Buy, is joining up with MP3 manufacturer and marketer SanDisk, and Microsoft and Apple competitor Real Networks to stage another attempt at unseating Apple from its throne atop the digital music player market -- a title it has held for years and years with excellently-designed hardware, intuitive interfaces and slick and integrated software.

There are plenty of opponents to Apple's closed infrastructure when it comes to the iPod/iTunes universe, but customers don't think so -- or they would not have made the iPod the best-selling digital music player ever. I often have conversations with types that believe Apple consumers just don't know any better than to purchase items within a closed infrastructure.

These folks generally miss the point entirely -- it's all about a great customer experience, with formats, open-source methods and feature sets a far (far) second place, if that. Apple has made me an admirer just because of the intense focus on the customer experience combined with design that is near-perfect, in my opinion. All this gushing (let the comments start!) from someone who doesn't even own an Apple product at this time.

Well, try as it might, SanDisk -- I believe -- still will not be able to match Apple's music player dominance, regardless of the captive computer memory chip business it tightly controls. This BusinessWeek article talks about SanDisk's vertical integration in flash memory, the feature bloat its music players have, and the lower price that SanDisk music players have against the formidable enemy, the Apple iPod. They still don't get it, and journalists still bring it up. Get what, you say?

Well, the iPod ecosystem is more than just a product -- and the ecosystem is globally formidable. There is a reason why no single company or service has encroached much into Apple's iPod territory. The iPod culture involves a design that probably can not be unseated (why don't more companies design so well?), an unmistakable first-mover advantage (think how iPod and the iTunes integration has cornered the music player market), a hip Apple culture that just won't go away (no matter how hard others try to unseat the monster) and the universe that revolves around the iPod itself:

• accessories for the range of players have created a complete economy by themselves
• the history the iPod has is no match for up-n-comers like Samsung and Creative Labs, no matter how hard they try (and they have tried for years to no avail)
• the content relationships Apple has -- in a single, easy-to-use place (iTunes) -- can not be matched by the disjointed choices for other music players
• the range of iPod products starting at $69.99 and going up to more than $400 -- that's quite an offering to fit any financial taste

So, even though SanDisk will always skim some buyers with the players it features -- most of which have feature bloat (how else can they market them?) -- and will court some buyers with pretty iPod-like design and even lower prices, it's doubtful they will make any significant dents into the iPod universe. Samsung has recently taken a similar course, designing very iPod-like music players with what I like to call feature bloat. Generally, adding features (that most folks would not use) is the marketing answer to increasing marketshare against an entrenched competitor. More bullets for the retail box, if you will, because bullets sell things besides guns and rifles.

If you hold Apple, and are watching all the recent moves in the iPod category as well as the Mac computer systems moving into the Intel era (more and more competing with the Windows empire in many ways), you are probably set to do well in the near-term.