Yahoo today announced that it has inked a deal with Sony BMG music to extend its video-on-demand license and allow users to use music from the record company's artists on their uploaded videos. Similar to its agreement with YouTube signed about a year ago, Sony will receive a cut of Yahoo's advertising revenue.

The deal is Yahoo's first of this kind and also allows it to distribute Sony BMG content through applications and widgets that users can embed in their own websites. Looking to avoid any legal hassles with copyright holders, the company said it will begin using its own video identification and filtering technology by early 2008, which sounds similar to the technology recently deployed by Google.