Is Facebook Working On An iTunes Competitor?

Everyone knows that Apple has the most successful online music store, with iTunes selling more than 3 billion songs.

Recently Amazon entered the digital music market with AmazonMP3, offering only DRM-free songs at a price more affordable than the $1.29 customers pay for non-DRM tracks on iTunes.

Now, according to Nick O'Neill of AllFacebook, Facebook could be the next company to take on iTunes. While this sounds fishy, as no one has received any previous word of such news, it does seem possible and the Facebook network could be a great community to market to.

"An extremely reliable anonymous source has informed me about Facebook launching an iTunes competitor within their company. Over the past months Facebook has been searching for a CEO to head up this new subdivision. Facebook has been pursuing agreements with a number of record labels. The target market was supposedly college students but unfortunately details are limited," stated Nick O'Neill.

As it stands, Facebook has more than 43 million users, many of whom are avid music fans, as the success of the iLike app has shown. This makes it very apparent that users of Facebook are interested in digital music, and if more than 50% of these users log in every day as TechCrunch says, then Facebook has a huge opportunity to somehow market music to this demographic.

O'Neill goes on further to say, "Facebook has been working on this project for many months now. I heard rumors of this back in March but none had been substantiated."

I can already envision Facebook developing a DRM-free marketplace complete with an app for users to share their favorite tracks and updates to the news feed when friends purchase music. Better yet, why not go the SpiralFrog route and offer free music with revenue generated through advertising. It would be very interesting to see this happen, and it would be even better if they could somehow work out a deal to integrate iLike into the mix.

Sure this news it still a rumor, but its very possible with more people seeking unprotected music, which is scarce among the wide selection of tracks on iTunes.

What I wonder the most is what the name of the service would be since Amazon was so dull with their selection. VentureBeat came up with FaceTunes and TuneBooks.