MySpace Music to launch in days: sources

By Yinka Adegoke

NEW YORK (Reuters) - News Corp's (NWSa.N: Quote, Profile, Research) MySpace, the largest online social networking site, will unveil a music joint venture with at least three major music companies within 5 days, sources familiar with the matter said on Wednesday.

Called MySpace Music, the service will be integrated with popular teen hangout MySpace.com and is being touted as a rival to Apple Inc's (AAPL.O: Quote, Profile, Research) iTunes online music store. It will offer music streaming, MP3 downloads, concert tickets, ringtones and merchandise, the sources said.

News Corp, Sony BMG Music Entertainment, Vivendi SA's (VIV.PA: Quote, Profile, Research) Universal Music Group and Warner Music Group Corp (WMG.N: Quote, Profile, Research) will each have a stake in the venture, the sources said. It is not clear if EMI Group, the fourth-largest music label, will be involved.

"It's really creating a robust monetization component to MySpace and having a focused music effort that could be the MTV of a new generation," said a music industry executive who asked not to be identified before the deal is formally announced.

MySpace is already one of the biggest promoters of music on the Web, with more than 68.6 million unique visitors in the United States in January, according to data from comScore.

Music companies believe a large part of the site's success has been driven by their artists' music, which fans upload and add to their personal pages.

"If you give people content they want and you make it easy to use and share, they won't even know they're in a commercial environment," said Forrester analyst James McQuivey.

The music companies have been in talks with MySpace for several weeks, but a key obstacle is a 2006 copyright lawsuit filed by Universal Music against MySpace. One of the sources familiar with talks said progress was being made and the suit could be settled in time for the announcement.