Representatives of the Beatles are in discussions with various online music services about licensing their songs for distribution on the Internet, according to people familiar with the discussions.

Representatives of the Beatles are in discussions with various online music services about licensing their songs for distribution on the Internet, according to people familiar with the discussions.

The Beatles have been one of the biggest holdouts in releasing their catalog for sale online, and the lack of such mega-hits as "Let it Be" and "Yesterday" has been cited as a major weakness for fledgling, Web-based music stores.

Negotiators for the Beatles have talked with several companies, with a particular emphasis on Microsoft Corp's MSN, which is expected to open an Internet music store late this summer.

"MSN is working very closely with the music industry to build a top-quality music service for consumers, which includes providing a wide selection of music, but has nothing specific to announce at this time," said a Microsoft spokesman.

The discussions by the legendary group were first reported by CNET on Tuesday.

Sources familiar with the matter said the current round of talks is being steered by the Beatles' representatives rather than their record label, EMI Group Plc.

Representatives of the band's two surviving members, Paul McCartney and Ringo Starr, could not be immediately reached for comment.

EMI owns the Beatles' master recordings and would be involved in any final agreement, the sources said. The label has been trying to urge the Beatles for years to grant permission to distribute their songs online.

"We think it would be great if the Beatles decided to make their music available on legitimate music services," said an EMI spokeswoman.

One person familiar with the discussions said he was optimistic that some deal could be reached by September.

"This would be a big deal because they have been one of the pre-eminent major holdouts in terms of licensing their digital rights," said veteran entertainment lawyer Jay Cooper. "In the past year, various major artists are starting to put their toe in the water."

Various services from RealNetworks' Rhapsody to Apple Computer Inc.'s iTunes to Roxio Inc.'s Napster would all jump at the chance to distribute the Beatles, who broke up over 30 years ago, analysts said.

"We've always been confident that artists would see digital music as a must-have platform. We're at the infancy stage of what will certainly be a booming business," said Evan Harrison, VP and GM of Time Warner Inc.'s AOL Music.

Apple Computer, which launched its popular iTunes music store over a year ago, has been embroiled in a legal dispute with the management for the Beatles since September.

The Beatles, who formed similarly named London-based Apple Corps. in 1968 to manage its business interests and act as its music label, have accused the computer maker of violating a 1991 agreement specifying it could use the Apple trademark for computer products only.

The Beatles management have said Apple Computer broke the agreement when it used the logo and trademark to promote its iTunes online music store, the most popular Internet download service in the world.

A London High Court judge in April struck down Apple's request to have the case heard by California courts. The computer maker argued the United States was the proper place for the hearing as this was where the original agreement between the two companies was struck.

--Reuters

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