Google has begun testing Google Music internally, a sign that the much anticipated service is nearly ready to launch.
Employees at the online behemoth have begun a process commonly referred to in Silicon Valley as "dogfooding", in which the employees try out a new service or product, music industry sources told CNET.
Two weeks ago, someone writing at the XDA Developers forum claimed to have accidentally discovered Google Music after installing the Honeycomb version of the Android operating system on a phone. Turns out it was indeed a working version of the service, music industry insiders said, adding that the final version could be much different.
Technologically, Google Music — a streaming service that users would access from web-connected devices — appears close to being ready. However, according to the sources a launch is being held up by the lack of one vital component: music.
Google did not respond to an inquiry about Google Music.
A year ago, Google managers told counterparts at the top four record companies that they hoped to have everything in place for a launch by late 2010, sources said. More recently, Google tentatively planned to demonstrate the service at the South By Southwest conference in Texas earlier this month.
Negotiations with at least some of the top publishers and four largest record labels are ongoing, according to sources. The delays are largely due to the complexity of the subject matter. Google is after cloud music rights and not just for songs acquired from Google Music.
Google is negotiating for the right to store users' existing music libraries on the company's servers, the sources said. According to a report in Bloomberg, the labels are in similar discussions with Apple about cloud music. The term "cloud" is often used to describe computing done on third-party servers rather than on a local PC.
Licensing rights for digital lockers form a largely uncharted territory for the labels. There are no templates for these kinds of deals lying around, and the record companies want to move cautiously as they assess Apple and Google's plans.
What's certain is that the big music labels want Google in the digital-music fray. All the sector's excitement and promise seemed to seep-out, starting two years ago when the second wave of iTunes challengers began to disappear.
Imeem, Lala, SpiralFrog, Ruckus, Project Playlist, MySpace Music and Zune all followed AOL Music, Urge and Yahoo Music into oblivion or irrelevancy. They all took their whacks at Apple's software, hardware and music store combination, and all lost. It remains to be seen what will come of Sony's new Qriocity streaming-music service.
Against the force of iTunes, it can't hurt to have a challenger come in that's of equal size. Google is one of the most powerful advertising companies of all time and has a history of providing consumer access to sought-after content. Unlike many past so-called iTunes killers, Google can also combine a digital music service with popular hardware (Android-powered phones).
And let's not forget that Google has already seen some success in digital music. YouTube's music videos, which are ad-supported and free to viewers, have become a popular way to discover new songs.