• Financial Times, Wednesday, March 5, 2008 10:46 AM

Facebook has approached the major record labels about creating a music service for the popular social-networking site. The approach, described as "preliminary," follows a similar move by News Corp.'s MySpace earlier in the year. MySpace is in talks to create an ad-supported music service with music's big four-Universal, Sony BMG, Warner Music and EMI.

The record companies see social networking as a way to offset shrinking physical album sales. They also see ad-supported music as a way to combat Apple's dominant share of the digital music market.

Facebook already offers third-party music applications from providers like iLike, Last.fm and Pandora, but it has yet to enter into any licensing agreements with the big record companies. Details about the social network's latest music plans remain vague, but record execs expect it to be a lot like MySpace's proposed service, offering free, ad-supported streaming music as well as the ability to pay for MP3 downloads, which are compatible with any music device.

Read the whole story at Financial Times »