Google Opens Music Store in Android Market

Google Inc. (GOOG), the world’s largest Internet-search company, introduced a music service that lets people buy songs through the Android Market, stepping up competition with Apple Inc. (AAPL)’s iTunes store.

Users will be able to store and stream as many as 20,000 songs on Google Music, the company said yesterday at an event in Los Angeles. Google has forged partnerships with 1,000 record labels, including Vivendi SA (VIV)’s Universal Music Group, Sony Corp. (6758)’s music unit and EMI Group Ltd., letting it offer a total of 13 million songs.

Google has expanded into music, television and movies to help promote its Android smartphone operating system and marketplace. The company, based in Mountain View, California, also will let users share music on its Google+ social network. The challenge will be weaning away users from Apple’s music products and services, which generated $6.3 billion in the last fiscal year.

“Music is more important to Google than ever before,” Jamie Rosenberg, director of digital content for Android, said at the event.

The service will offer reviews, band information and exclusive content from artists such as Coldplay. Users will get 90-second previews of songs before they buy. For a one-time $25 fee, Google also is allowing artists to create pages to display videos, bios and sell self-published music. Users will receive 70 percent of sales and can set pricing.
Fighting Piracy

For record labels, the effort helps ensure that consumers purchase their music legally. It also decreases music companies’ reliance on iTunes, the leading seller of digital songs.

“Any new legitimate place to consume music legally is the best tool we have to combat piracy,” Rob Wells, who oversees digital operations at Universal Music, said at the event.

Some songs are free, while others cost 69 cents to $1.29. The service will work closely with T-Mobile USA Inc., letting that carriers’ customers pay for tracks on their phone bills. Warner Music Group hadn’t yet reached an accord with Google because of pricing and piracy concerns, two people familiar with the matter said earlier this week.

Google shares fell 0.8 percent to $611.47 yesterday. The stock has climbed 2.9 percent this year.

Apple first unveiled its iPod music player in 2001, and in 2003 started the iTunes music store, offering songs for 99 cents apiece. The company has benefited in the past decade from the shift to online music services from CDs. Apple’s iTunes service works on its own devices, such as the iPod, iPhone and iPad tablet, as well as personal computers from other manufacturers.
Android Versus IPhone

Google competes in the smartphone market by letting manufacturers customize the Android system for their hardware. T-Mobile introduced the first phone powered by Android software, made by HTC Corp., in October 2008, more than a year after Apple’s iPhone debuted.

Android led the global smartphone industry in the third quarter, with 53 percent of the market, according to Gartner. Apple’s iPhone software had 15 percent.
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