Social networking giant MySpace is developing an ecommerce solution that will allow artists and labels to sell music through its site, as well as through other websites and blogs.

Social networking giant MySpace is developing an ecommerce solution that will allow artists and labels to sell music through its site, as well as through other websites and blogs.

MySpace will make the feature-a widget-like mini storefront application that can be embedded into Webpages-available to a limited pool of test users over the coming months. It will roll out ecommerce functionality on a wide scale basis by the end of the year.

San Francisco-based Snocap, the digital distribution services company from Napster creator Shawn Fanning, is powering the technology and handling the transaction processing.

MySpace users will be able to sell files directly from their profile pages and other Web sites, but only in the MP3 format. MySpace CEO Chris DeWolfe says that the company is avoiding selling tracks encoded with digital rights management (DRM) technology because it wants to ensure iPod compatibility.

No DRM means the majority of major label acts using the site will forego making use of the solution. But with more than 3 million artists using MySpace, most of them independent acts, major label material represents a small fraction of the music offered on the site. And DeWolfe says the majority of MySpace acts, as well as their fans, want MP3s.

In another twist from most music services, MySpace will feature variable pricing. Content owners will set the price of the files, which can be sold either as a la carte tracks or album bundles.

Artists and labels selling through MySpace also receive the HTML code for the application so they can embed it inside other blogs and Web sites not affiliated with MySpace. Additionally, the code is featured directly beneath the storefront on the seller's MySpace profile page so fans can also embed the code in their Web sites. (Third parties do not get a piece of the sale for embedding the application in their Web sites or blogs.)

The storefront application doesn't require the buyer to link back to MySpace at the time of purchase. However both MySpace and Snocap collect a small transaction fee on every sale, no matter whether it takes place on a MySpace page or through some other Web site. MySpace and Snocap have not disclosed yet how much the fee will be.

Purchases will be handled by eBay's alternative payment system, PayPal. Credit cards will not be accepted at launch.

Consumers must register for accounts with Snocap and Paypal before they can purchase songs.

Artists also need to register their content with Snocap. Snocap's content fingerprinting and filtering technologies will block unauthorized content sales.
MySpace and Snocap have been quietly testing the solution since July.

Vanity Label/Nettwerk act the Format is among the initial bands in the trial. Visitors to www.myspace.com/theformat can buy MP3s from the album "Dog Problems" for 79 cents a track.

The initiative marks the first commercial bow of a Snocap technology. Snocap launched more than a year ago with the goal of providing commerce solutions to peer-to-peer networks. However, as legitimization of the P2P world has been slow to evolve, Snocap CEO Rusty Rueff says the company has been looking to other ways to enable commerce among indie acts and viral Web communities.

In ramping up e-commerce functionality MySpace is attempting to monetize the massive music community it has built up since its launch in 2004. In recent months the site, a unit of NewsCorp.'s Fox Interactive online division, has been looking to create additional sources of revenue, inking a lucrative search deal with Google, and introducing sales of television shows including "24".

For independent artists and labels, the ability to sell music in an iPod-friendly format represents an opportunity to finally participate in commercial digital distribution in a meaningful way. Many MySpace acts are unsigned or record for small labels that are not represented in leading music services like Apple Computer's iTunes, Napster and Rhapsody.