Google working on something like iTunes

Google Inc is seeking agreements with record companies by the end of the month to start a music store that will compete with Apple Inc’s iTunes, three people with knowledge of the talks said.

Google is seeking permission to sell downloads and to stream purchased music to its customers’ devices, said the people, who requested anonymity because discussions are private.

Accords with record labels would help Google, the world’s largest Internet-search company, extend its push into entertainment. In May, the Mountain View, California-based company added music storage and movie-rental features to its Android software for phones and tablets.

In an e-mailed statement, Google declined to comment on the discussions, which were reported earlier by the New York Times.

Google’s Music Beta service, announced May 10, was started without record-company licenses. It stores users’ song libraries and playlists, and suggests music based on listeners’ collections. The company also offers movies for rent through the Android Market.

The move into entertainment represents an effort to diversify revenue, boost advertising sales and keep users on Google’s sites longer.

Apple, based in Cupertino, California, this month introduced iCloud, a service that stores music, photos and documents online for use on Mac computers and mobile devices like the iPhone and iPad. The company is in discussions with movie studios to put films on iCloud, people with knowledge of the discussions said this week.

Google yesterday reported quarterly sales and profit that beat analysts’ estimates as businesses spent more on advertising to online consumers. The shares rose 6.4 per cent to $594.60 in extended trading, from a close of $558.99 in the US before the results.