Facebook & Google Boogie Down, Announcing Plans to Launch Music Services

Paint it Blue: You can now give the gift of the Stones on Facebook. Did anyone see this coming in 1964? (via Flickr)

While record labels are continuing to suffer as a result of the changing nature of music consumption, new media companies are finding ways to profit. Last week, news broke that both Google and Facebook will soon be putting a greater emphasis on music. With these uncannily timed announcements, it’s safe to say the music industry will be turned on its head yet again – possibly even edging out newly minted powerhouses MySpace and iTunes.

Facebook, which has famously overtaken MySpace as the world’s largest social network, has continued to lag behind its competitor when it comes to incorporating music. So this latest move is a long time coming and something that has been rumored for years.

But while MySpace puts its focus on band promotion and exclusive entertainment experiences, Facebook is taking a very different route: the humble virtual gift. Sometimes for free, and almost always for a dollar or less, a user can send a fun, heartwarming, cheeky or thoughtful gift to his or her friends. But dollars add up, and the virtual goods industry is now estimated to be worth nearly $1 billion.

Recognizing the profit potential, Facebook has overhauled its gifting platform significantly in recent months and adding music to the mix is sure to take it to the next level. Allowing Facebook users to send their friends downloadable songs is a natural next step for the social network. The Facebook blog describes how it will work:

You now will be able to purchase songs as gifts for your friends. The “Music and MP3s” section of the Gift Shop, powered by LaLa.com, offers over 8 million songs for any music lover from artists such as Beyonce, the Rolling Stones, Frank Sinatra, Imogen Heap and even Wolfgang Amadeus Mozart. Web songs are 1 credit each, while full, downloadable, and digital rights management-free (DRM) MP3s are 9 credits each.

News was also leaked last week about Google’s own moves onto the dance floor. Rumors about the upcoming launch of their new music service, which may officially be announced this week, cite deals with LaLa.com, Imeem and iLike as a way to “give users a more efficient way to find, learn about and sample music after they search for information about bands, albums or songs,” according to the New York Times. As PC World notes, Google already has an ad-supported music search service in China; how much the American version will replicate this remains to be seen.

The global digital music market is a nearly $5 billion industry. With the new dimensions added by Google and Facebook, there will be even further monetization opportunities for marketers.

On Google, brands will be able to harness consumers’ expressed interest when they search for certain songs or musical artists; there may also be an opportunity for location-based search ads for concerts or other events. On Facebook, the opportunity is more about leveraging pass-along, possibly sponsoring free songs or offering consumers free downloads for their birthdays. With music such an integral part of people’s everyday lives, it’s exciting to see Google and Facebook creating new ways for marketers to get into the mix.