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Apple, Google, Microsoft Prepare for Music Arms Race

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It's been a busy month for tech giants angling to grab a piece of the musical pie.

First it was Microsoft (Nasdaq: MSFT  ) introducing Xbox Music, a richly featured digital music service that will feature music discovery, play list streaming, and MP3 purchases.

Then we had renewed -- though as of yet not officially confirmed -- reports of Apple (Nasdaq: AAPL  ) in talks with the major record labels to finally introduce a streaming music service of its own. The chatter was enough to send shares of Pandora (NYSE: P  ) plunging by as much as 20%.

Now we have Google (Nasdaq: GOOG  ) making radio waves.

"We've partnered with Warner Music Group who will be adding their full music catalog with new songs coming each day," the world's leading search engine revealed on Monday. "We're now working with all of the major record labels globally."

There really wasn't any doubt that the titans of tech were interested in music. The problem -- until recently -- was that it was pointless to compete against Apple's iTunes Music Store. It's been the country's top music retailer for years, and that's without selling a single CD.

However, as Pandora popularized music discovery and Spotify washed ashore with the licenses and interface to make customized play lists work, it has been the small players garnering attention.

Radio has taken notice. Clear Channel added a Pandora-like component to its popular iHeartRadio app late last year, and Sirius XM Radio (Nasdaq: SIRI  ) is hoping to launch its own Pandora-ish platform before the end of the year.

As you can expect, being a big technology company doesn't make you nimble. Apple has been surprisingly slow-footed as Pandora and Spotify grew in popularity, even as digital music sales growth has stalled. Google's deal to arm Google Play with content doesn't have a clear endgame at this point. Xbox Music seems to have the right idea, but gunning for Apple, Spotify, and Pandora with its three-pronged attack may ultimately tag it as a jack of all trades, but master of none.

These are certainly interesting times, and it's never been more convenient to be a music fan that wants to be exposed to easy access and new music.

The big boys have arrived, but it doesn't mean that the opening acts won't blow away the headliners.

Streaming out loud
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Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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