Coverage from VentureBeat:

In an effort to grow its user beyond the walled-garden that Zuckerberg built, Spotify launched a “play button” feature allowing users to embed the Spotify player into websites back in April. Its new Yahoo distribution deal means that play button feature will get taken advantage of. The deal itself is similar to Spotify’s distribution deal on Facebook: It will only play songs that have already been downloaded and opened using Spotify’s software. Obviously, the added presence on Yahoo’s web portal is likely to bring new users to Spotify.

From the press release:

Yahoo! (Nasdaq: YHOO), the premier digital media company, and Spotify today announced a global content distribution and promotion agreement that will enable Yahoo! to integrate and promote Spotify’s on demand music service on Yahoo!’s Media Network, which reaches nearly 700 million unique users monthly – over 47 percent of the total worldwide Internet audience (comScore World Metrix, May 2012). Spotify will initially roll out to Yahoo! Music and later will be contextually integrated globally across the rest of Yahoo!, including its leading entertainment sites, like Yahoo! Movies and omg!. In turn, Yahoo! will create an app for Spotify’s platform featuring Yahoo! original entertainment content, which will reach Spotify’s more than 10 million active users.

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