Google is reportedly on the verge of launching a new search product rumored to be called "OneBox" that will better organize results around music artists with background information, song previews, graphics, videos and more. The company will not become a music retailer or host any content itself, however, but rather stream songs from Lala.com, MySpace-owned iLike.com and other services.
Google’s music search service is expected to be officially announced next week and will include music from all four major labels. Further details remain sketchy at this point. As far as I can tell, Google will just be making it easier to find music that's legally available elsewhere on the web (and probably make some revenue-sharing deals) instead of directly competing with Apple’s iTunes and similar services -- sort of like Yahoo has been doing with RealNetworks’ Rhapsody.
Regardless, the idea sounds like an important (if not late) step into music for Google that should help it harness more traffic from music fans looking for information on artists.