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MSN, Pandora sync online radio

Microsoft's MSN has turned to music-upstart Pandora to recycle and rev up its free online radio service.

In the last week, MSN quietly re-launched its online radio service powered by Pandora, a music recommendation engine that lets people create custom radio stations and discover new music related to their favorite artists or songs.

Pandora came on the scene last November and has already attracted more than 1.1 million monthly visitors, according to research firm ComScore. In contrast, MSN Radio's monthly visitors dropped 9 percent to 2.5 million from October 2005 to October 2006.

The deal will give Pandora millions of new listeners, and it may give MSN Radio a much-needed boost in online radio to rival No. 1 Clear Channel and No. 2 Yahoo Launchcast. Because apart from Clear Channel, all of the major portals are losing ground in streaming radio to smaller outfits. What the MSN-Pandora deal shows is that they need to jazz up their services with music-discovery features or other tricks like social networking.

According to ComScore, monthly visitors to Yahoo's Launchcast dropped 20 percent to 6.8 million from October 2005 to the same period a month ago. AOL Radio dropped 22 percent to 4.4 million over the same time. In contrast, music social networking site grew by 813 percent to roughly half a million users.

An MSN representative said that the Pandora deal is designed to improve MSN Radio with a free music recommendation engine. The service replaces the old free MSN Radio, as well as MSN's former premium radio service. Listeners can still pay to get MSN Radio without ads.

Tim Westergren, founder of Pandora, called it a co-branding deal that has Pandora replacing most of MSN Radio's previous functionality.

"We're always looking for the right partnerships, anything to help grow the listenership," he said.