Elinor Mills has a brief post reporting that Bear Stearns analyst Robert Peck is predicting that Google will offer a digital music download service in the three to six months. Bear Sterns is using the name the name "Google Tunes" as their "code name" for the service. A Google spokesperson declined to comment on the story.
I've speculated on a couple of occasions that a music download service would be service that Google would eventually offer.
Our May 5, 2005 post titled: Let's Speculate: GoogleMusic.com pointed out that Google has owned this domain since February 2003, after acquiring it from someone in Curacao. Of course a domain name doesn't guarantee or really mean anything only that it's something to think about.
Also, on Jun. 20, 2005, we blogged a Google Blogscoped item that had a few comments from Dave Winer about a Google iTunes clone.
That was then.
Today, Google's payment system is now operating with the Google Video Store and rumors of the "Google Wallet" (whatever it may be) make the possibility even greater IMHO. Even the recently launch of Google Music Search might send a clue or two.
Searching might be built right into the Google Desktop. In fact, a popular add-in currently allows you to operate several iTunes functions directly from a sidebar plugin.
Of course, just like with video content, Google would face stiff competition from the likes of iTunes, Yahoo Music, Napster, Rhapsody, and many others. Since money is not a major issue at Google, they could (for a period of time) lower the cost of downloads to help gain market share. Rhapsody offered songs at 49 cents for period of time in 2004.
"Google Tunes" would also give Google another revenue more places to put contextually relevant and keyword ads for related products like MP3 players, concerts, t-shirts, etc. They could also cross-promote Google Tunes with Google Video. Buy a song from a certain artist and get the video OR by the video and get 20% of that artists album. \\
And don't forget the synergy between Google Book Search and an audio/music store as well as an upload program that would allow
musicians to sell their music online.
One thing Google's entry into the music marketplace could mean is lower prices for consumers. That's cool.
Another revenue stream might have Google allowing offering a monthly subscriptions of unlimited downloadable content and/or one for those who only want to stream music to their computers. Many services already offer these services. In fact, I'm listening to a playlist of music I created via Rhapsody as I write.
Finally, many music services work with universities offering free or subsidized access for students. This is another market that I'm sure Google would want to play in given their cred on college campuses.
Google's greatest challenge? Quality content and then more qualuty content.