Web giant Google is reported to be launching an iTunes-busting service that would integrate search and music.
Sources have claimed that Google has spent several weeks securing content from major music labels for the launch of the service, which they claim will make it easier to discover, sample and buy songs on the search engine.
Users will be able to purchase songs streamed on the Google page by clicking through a "buy" button to a variety of sites including Amazon.com and Apple's iTunes Music Store.
Start-ups iLike and LaLa will facilitate the new feature from October 28, said the sources, who were not permitted to speak publicly about it ahead of the launch.
The new service will involve all of the major music labels - including Universal Music Group, Sony Music Entertainment, Warner and EMI.
The labels are hoping that by making it easier to search for music, they can increase the size of the digital market, which is currently dominated by iTunes, with about 70% of download sales.
CEO of we7 – claiming to be the most accessed UK music site with 2.5m monthly users - Steve Purdham, said that the move should be welcomed with caution.
“Online music access seems to be the media darling of the moment, and columns abound with rumours like today’s story about a Google music service,” he added.
“While the concept is much discussed, most people are still avoiding the big question and that is can it be made to add up. MySpace Music, Imeem and Spotify are all facing the simple economic reality that scale is not the main issue, economic sustainability is.”
Purham continued, “YouTube, for example, is still yet to turn a profit since its acquisition in 2006. However, the site continues to rapidly expand, announcing recently that it was servicing 1 billion views per day.
“This ability to grow the video platform on such a scale without concern, for the time being at least, without developing a sustainable revenue model, shifts focus away from the innovation needed to make the internet a strong business environment for media.”
Purdham went on to say that Google Music would be great for the consumer, but, he warned, the biggest thing the music industry needed was the demonstration that the economics can be made to work.
“Focus has to be on payment to the artists, transparency of the model and sustainability. Once this happens then scale and opportunity can be allowed to fly in a really positive way,” he concluded.
“we7, with good support from the labels, has built an outstanding music service and have achieved the No. 1 most accessed UK music site with 2.5m monthly users and our focus is on making ad funded model work.”