Google Music in Negotiations But MP3 Store Not Imminent
Google Music in Negotiations But MP3 Store Not Imminent

Google is continuing its long-running negotiations with record labels for an MP3 store and expanded cloud storage service, according to major label sources with knowledge of the discussions. But these people say no agreements have been reached yet and the launch of a Google MP3 store is not imminent.

A New York Times post on Thursday reported that Google "is in negotiations with the major record labels" to acquire the necessary licenses to expand the capabilities of Music Beta, the company's web- and cloud-based music product. The report came on the same day Google announced its fiscal third quarter earnings were $2.7 billion, up 26 percent from the prior-year period, on revenue of $9.7 billion.

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Google Music Beta is similar to Amazon's Cloud Drive in that each user's individual files are uploaded to Google's servers - a time-consuming process that can take hours if not days for a large collection. It debuted in May to a lukewarm reception and has arguably been crowded out of media attention by streaming services since Spotify's July launch in the U.S.

Google Music Launched Today -- Without Licenses

Apple's soon-to-launch iTunes Match, which will work in partnership with the new iCloud service, will scan the customer's hard drive and match that person's collection with licensed files already on Apple's servers. Only tracks not in the licensed catalog will be uploaded separately.

Google is facing a tough timeline and is late getting into the MP3 game. Apple has already announced iTunes Match will launch by the end of October, and iCloud launched Wednesday. There are already a number of established music download retailers - iTunes, Amazon MP3 and Beatport, among others. And Google, which gets the vast majority if its revenue from text advertisements, will have the task of proving it can build a successful, consumer-facial retail product that sells digital media goods.

In any case, Google Music continues to staff up. The latest hire is David Krisnky, formerly the general manager of label relations and business development at Rhapsody.