Yahoo has expressed an interest in the privately held company that lets people store, play and share their MP3 music collection online, the sources said, although no deal has been completed. An existing agreement between Myplay and America Online could provide some last-minute complications.
Representatives for Myplay and Yahoo had no comment.
If completed, the deal would be Yahoo's latest attempt to expand in online music--one of the Internet's hottest markets.
Myplay launched in October 1999. The company lets people access its digital music collections from anywhere in the world and from multiple devices, including PCs, laptops, handheld devices and cell phones.
In March, Myplay announced a deal with AOL's Winamp and Spinner to integrate the Myplay Web-based application into the two popular Web sites. As a result, AOL would be able to compete with companies such as MP3.com.
MyPlay offers a service similar to the My.MP3.com site that was recently ruled illegal by a federal judge. But where MP3.com allowed its customers to listen to music without first uploading it, MyPlay requires subscribers to upload their own songs into digital "storage lockers" that allow access to the songs from any Net-connected machine. That means the court ruling, which still threatens MP3.com's future, will likely have little direct impact on MyPlay's business.
Earlier this month, Myplay completed a round of financing totaling more than $18 million, led by Vulcan Ventures, the investment arm of Paul Allen.
Myplay's partners include EMusic.com and RollingStone.com. The company also has marketing agreements with Dreamworks Records, Artemis Records, Beggars Banquet, BeyondMusic.com and Jive Records.