Google Music Store Would Provide New Revenue Stream

Tags : Google, Music Store
Posted on : Feb 28, 07 03:09 AM

Google is preparing to launch a music downloading service, according to research firm Caris & Company.

Late last week, Google (nasdaq: GOOG - news - people ) met with a group of music industry executives and described the private event as merely for "networking." But Caris analyst Mark Stahlman suspects that Google is getting ready to launch a Music Store to rival Apple Computer (nasdaq: AAPL - news - people ) iTunes.

"The music industry is broadly unhappy with the fixed pricing and lack of subscription options at the market-leading iTunes Music Store and likely to support alternative services," wrote the analyst in a recent report.

In the company’s recent analyst meeting, Google highlighted plans to broaden its business by expanding into media downloading and localized ad-search.

In addition to the potential Music Store, Google has expanded the availability of its experimental local AdWords to all customers in the U.S., Canada and Britain. Integrated into Google Maps, the service is expected to allow targeting ads based on the user’s location.

Verizon Communications (nyse: VZ - news - people ) has also just announced that it has become an AdWords reseller. According to Stahlman, Google may begin to monetize this service through such partnerships.

The Caris analyst maintained "buy" rating on Google. He continues to project 2006 revenue of just over $10 billion for the company and believes that this could grow to as much as $100 billion in five years.

"Should the revenue streams from these new businesses achieve the success we think possible, it is quite possible that estimates will prove too low," Stahlman said.

Source from Forbes.com

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Google Music Store Would Provide New Revenue Stream - Forbes.com Caris & Company maintained a buy rating on the Internet company.
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