As expected, MySpace today officially announced its MySpace Music service. The move clears up much of the speculation and conflicting reports surrounding the much-rumored launch, but not all.

Set in stone are the participants. All major labels save EMI Music Group are onboard, having finalized licensing deals as late as last night. EMI is expected to come to an agreement soon. Its absence is primarily attributed to the changing management structure of the company. EMI, on Wednesday, named a new digital business president, who will start April 28.

Not yet included are independent labels and aggregators. According to MySpace CEO Chris DeWolfe, the initial effort was focused on getting buy-in from the major labels.

Exactly what the service offers, and for how much, and when, is still a bit unclear. But the service is no mere download store, but rather a range of functionality that spans various areas of the MySpace social network-including a MySpace Music homepage, artist profile pages, and individual member profiles. The service will offer DRM-free downloads, free audio and video streaming supported by advertising, a mobile storefront powered by Jamba (owned by sister company Fox Mobile Entertainment) and "various sponsorship solutions."

MySpace members will have the ability to personalize all their music content, from creating playlists to personalized storefronts, and stream songs in full from their profiles, as well as place links to buy tracks from their favorite artists. Artists can use their profile pages to sell downloads directly, as well as sell ringtones, wallpaper images, concert tickets and merchandise.

These services will roll out in phases over the course of the next several months, expected to be completed by the summer. DeWolfe says it must first populate the site with the newly licensed music before the services can launch. The most likely immediate beneficiary will be full-song streaming services. Labels like UMG have limited the streams their artists can post to MySpace pages for lack of a revenue stream. DeWolfe says MySpace is currently in discussions with several technology and distribution partners to power both the full-song download service, as well as for the proposed ticketing, merchandise and ringtone elements.

Exactly what services will be available from the mobile storefront is also not yet known.

Financial terms of the partnership were not disclosed, but Billboard.biz understands that the service is a joint venture, co-owned by the participating record labels. The separate company will be based in Los Angeles, and MySpace is currently conducting an executive search for a management team. The CEO of the new service will report to DeWolfe. Until more detail is available on how these services will look and be offered to users, the music industry remains largely bullish on the potential.

"We're excited about the combo of social network on one side and access to music on the other," says Sony BMG global digital business head Thomas Hesse. "Bringing those together is the winning combination." One of the more interesting elements is the joining of forces to bring advertisers to the site. MySpace has a massive advertising presence, with $500 million in online ad revenue last year.

Part of the new MySpace Music venture involves sponsorship opportunities that would marry major brands to special music events. For instance, MySpace last year brought in State Farm Insurance to sponsor both the live and online broadcast of the Projekt Revolution concert by Linkin Park and My Chemical Romance. More of the same is expected.

"We have a core competency in ad sales and ad sponsorship sales both from the technology perspective in ad-targeting as well as a sales organization of 200 people," says DeWolfe.

There's also a strong promotional benefit to the deal. Since soon after its launch, MySpace quickly established itself as the de facto online presence for literally millions of bands unable to develop more full-featured stand-alone Web sites. Besides the simplicity of building profile pages, MySpace also brought with it the power of social networks.

Fans add their favorite band profile as "friend" on their profile, allowing others to discover new artists simply by their association with their peer group. With over 100 million active members and 30 million unique monthly visitors, MySpace is a prime vehicle for promoting new music and artists. As a result more than 5 million artist have added profiles to the service.

Yet to date, MySpace has not been a significant revenue generator. The MyStores widget, developed by SnoCap to let artists sell individual tracks from their profiles, was a bust. WMG was the only major label to use the system, but at the time insisted on downloads carrying DRM protection. Independent artists using the system in a DRM-free mode didn't get very far either.

Since that effort, MySpace did little to advance the music page. As it turns out, most of the activity was taking place behind the scenes. "We hadn't done a lot in the last year to really innovate on our music service," says DeWolfe. "We made a conscious decision to figure out where the Internet was going, where the music industry was going, and where should it be going. We started out with the users. We did focus groups and took feedback from our users. Then mocked up what we thought would be the perfect service."

MySpace shopped the idea to the labels and took a very open-minded approach to working out the business models. Spinning off the music service into a separate company in which the labels could own equity proved the winning model.

The labels, meanwhile, proved more open-minded in their approach to licensing. "Modern music is really about letting users determine their own experience," says DeWolfe, something labels have been reticent to allow in the past.

But with this deal, the music industry seems poised to embrace a community-focused Web 2.0 model for monetizing music.

"Enabling the fans to discover more music, sample more music and buy more music is all intertwined," says Hesse. "It's all part of embedding the music itself to the social network. We think it makes for a much more lively next generation environment."