MySpace Launches New Online Music Service

It seems like all the cool kids have been gravitating toward Facebook lately, but MySpace isn’t out of style just yet. Today, the News Corp.-owned social networking giant announced its partnership with three major music companies — Sony BMG, Universal Music Group and Warner Music Group — in creating a new online music service, according to The Wall Street Journal (a fellow Rupert Murdoch product). The ad-supported MySpace Music will offer free tunes and video streaming, as well as paid-for MP3 downloads and other digital goodies like ringtones, and MySpace’s COO told the Journal that the new service would build on the site’s already popular music environment, giving it "the potential to be a significant revenue driver." Could be bad news for iTunes, but as far as the competition with Facebook goes, that site still seems to be way ahead in the "killing time while at work" department — Scrabulous anyone? More from WSJ after the jump.

The move comes amid signs MySpace, which has about 110 million monthly users, is losing momentum to Facebook and other fast-growing upstarts. News Corp. also is ramping up efforts to generate more advertising and other revenue from MySpace. News Corp. owns Dow Jones & Co., publisher of The Wall Street Journal.

"This has the potential to be a significant revenue driver," MySpace Chief Operating Officer Amit Kapur said in an interview. He said the music service builds on what is already a thriving environment for music on MySpace, and the hybrid business of ad-supported music and downloads gives MySpace more than one revenue stream.

Pushing into a music service may be an uphill climb for MySpace. It will compete with Apple’s popular iTunes service and similar offerings from Inc. There are also myriad Internet sites where users can listen to music for free.

But in essence, MySpace is reaching into its roots with the music service. MySpace became popular as a way for users to connect with their favorite bands and add songs to their profile pages. Listening to music remains one of the most popular activities on the site, which has since branched into online video and other media efforts.

"Our intent is to make MySpace Music the dominant social music experience on the Web," Mr. Kapur said.

MySpace Launches New Online Music Service