Will this be yet another streaming service, or a more ambitious ad-supported download offering?
It may very well be neither. Google partnered with Top100.cn to offer a free ad-based music service in China last year. We can't draw parallels to that offering, though, because China is a country where 99% of the music consumption is believed to be pirated. The labels were more than willing to cave in to a revenue-sharing option, because it was better than what they were getting from music searches through sites like Baidu
There is just no way that an ad-based downloading service can deliver the kind of revenue that the major labels receive through Apple's
The opportunity here may rest in attracting unsigned and indie-label artists -- similar to the old MP3.com site -- but that would only address the supply side of the equation.
Moving beyond the stream?
It bears pointing out that Google has already been wheeling and dealing with the major labels, brokering revenue-sharing deals with many of them through its popular YouTube video-sharing site. However, those are streams. Google has a tall order if it expects labels to sign off on free -- or even discounted -- music downloads, since the music makers would be all but kissing digital sales goodbye.
I also think the Google Audio name is important. Why not Google Music? Clearly, this will be about more than prerecorded music, if it ever does materialize. Will its Google Books digitization efforts also be transcribing out-of-print and public domain texts into audiobooks? If so, Amazon.com
For now, let's let this crispy rumor simmer until it's official. One has to think that Google won't show up late to the game with a poor man's Pandora. Not everything that Google touches is gold -- or even ambitious -- but it's usually well-thought-out and strategically savvy.
Until the details come in for a sound check, it's safe to mute this chatter.
What would you like to see in Google Audio? Name your tune in the comment box below.
Baidu, Google, and Sohu.com are Motley Fool Rule Breakers picks. Apple, Amazon.com, and Best Buy are Motley Fool Stock Advisor recommendations. The Fool owns shares of Best Buy, which is a Motley Fool Inside Value selection. Try any of our Foolish newsletter services, free for 30 days.
Longtime Fool contributor Rick Munarriz has been a fan of China's growth stocks for several years now, even though he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.