Yahoo! is preparing to dump its Yahoo! Music Unlimited service and replace it with a partnership with RealNetworks' Rhapsody. A few weeks ago we reported on a rumor that Yahoo! was exploring the idea of launching a DRM-free music store to compete with Apple and Amazon. It looks like the company decided to go another direction.

Both Yahoo! Music Unlimited and Rhapsody allow users to access a large library of on-demand music for a subscription fee. But while Yahoo! has been charging $5.99 to $8.99 per month, Rhapsody charges $12.99 per month. Existing users will have their accounts automatically transferred to Rhapsody, with their music libraries intact. But when you're contract runs out, you'll be charged the higher rate.

Yahoo! and Rhapsody are also exploring collaboration on other projects, including music downloads.