Digital Media Association Executive Director Jonathan Potter called the ruling "a huge win for music innovators and listeners." "Consumer-influenced radio is a fabulous marriage of music, technology and fans," he said in a statement. DiMA represents Yahoo and other online content providers in Washington.

Meanwhile, a Bridge Ratings study released earlier in the week showed the most popular Internet radio service was America Online's, with those surveyed spending 15.25 hours per week listening to the service. Yahoo and Live 365 were the runners-up with 10.25 and 10.6 hours respectively.

According to the study, the number of monthly Web radio listeners jumped 26 percent last year bringing the average monthly listening audience to 72 million in 2006, up from 45 million in 2005.