Google Inc, developer of the Android mobile phone platform, plans to start a subscription music streaming service to challenge Spotify Ltd, two people with knowledge of the situation said.
Negotiations are under way with major record labels to license their music, said the people, who sought anonymity because the talks are confidential.
Google, which also owns the YouTube video Web site, is also discussing renewing deals that cover the use of songs in videos made by consumers, they said.
The worldwide service is targeted for a third quarter start, one of the people said.
The effort would strengthen Google’s ties to consumers through its Android software, the most popular operating system in smartphones, as consumers access more music and videos on the go. Spotify lists 5 million paying subscribers and 20 million users of its ad-supported service in 17 countries.
Christopher Katsaros, spokesman for Google, said the company does not comment on rumors or speculation.
Google’s talks with the record companies and music publishers for a streaming service was reported by the Wall Street Journal on Friday.
Apple, maker of the iPhone, is also planning a music service that would challenge Spotify in streaming and Pandora Media Inc in Web-based radio, people with knowledge of the situation said in September last year.
Google’s service would work on Android and non-Android devices, one of the people said.
Google, based in Mountain View, California, declined 1.1 percent to US$790.77 at the close in New York on Monday, leaving the stock up 12 percent this year.