Facebook is So Launching a Digital Music Service

The long-standing rumor that Facebook will launch its own digital music service is back in the news today. According to The New York Post, the social network is in talks with a number of existing players in the online music space regarding what the paper calls an “outsourcing deal.”

As opposed to MySpace, who forged a deal with the four major record labels to launch its own digital music venture last month, Facebook already plays hosts to a number of popular music apps on its site. With more than 5 million active users, iLike is by far the most popular, with other apps like imeem, Pandora, and My Music (by Qloud) with user counts in the low six-figures.

So what might a joint venture between Facebook and one of these applications look like? While The Post is scant on details, what seems likely would be a partnership where Facebook either takes an equity stake or gets a cut of revenue produced by the application they choose as their partner.

Through its Great Apps program, Facebook has already demonstrated that it will give certain apps within its ecosystem preferred status. If Facebook were to take a stake in iLike, for example, there are certainly a number of buttons the social network could push in order to make the app more successful and drive more revenue, such as giving iLike more prominence in user’s News Feeds.

One way or another, Facebook will get into the digital music business at some point – it’s simply too big of an obvious revenue generator to ignore. How they do it is the question that will seemingly remain a subject of speculation for at least a bit longer.

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