The troubled Yahoo! is fighting to regain its financial strength and announced it is selling its digital music subscription service, Yahoo Music Unlimited, to Rhapsody America. Rhapsody is a partnership of Real Networks and MTV Networks.

"This really works to make Rhapsody much more available to a much wider audience," said Dan Sheeran, a senior vice president at RealNetworks, to Reuters.

The Yahoo Music site is getting more than 20 million visitors a month but the company doesn't want to disclose how many Music Unlimited customers it has. After the service will be moved over to Rhapsody, only three such services will still operate: Rhapsody, Napster and Microsoft's Zune Marketplace. Yahoo Music Unlimited charged customers between $5.99/ month and $8.99 /month, compared to Rhapsody’s $12.99/ month charge.

This raises doubts as to whether this business field has enough potential or if just nobody figured out how to make serious money off it.

"This is about focusing in the right places," said Ian Rogers, vice president of video and media applications at Yahoo. "The whole point is we wanted to get resources for working on different things."

The company announced it would cut 1,000 jobs by the end of February after the sales in the fourth quarter dropped 23 percent.

Also, Terry Semel, former CEO of Yahoo, resigned late Thursday as chairman of the board. In June Semel stepped down from the position of Yahoo’s chief executive after six years at the post, and was replaced by Jerry Yang, one of the original co-founders of Yahoo. In 2006 investors lost confidence in him when Yahoo lost ground in Internet advertising to Google.

According to the company’s estimations, the net income for the last quarter ending December 31 dropped approximately 60 million dollars compared to the same period a year ago, while the operating income fell 38 percent compared to last year, to $191 million.

Microsoft was quick to exploit Yahoo's moment of weakness and Microsoft Chief Executive Steve Ballmer has made public an unsolicited $44.6 billion offer from Microsoft, 62 percent premium above Yahoo’s closing stock price on Thursday.