Google employees have begun testing Google Music internally. This would suggest the much anticipated service is nearly ready to launch, according to music industry sources cited by CNET.
Google Music, a streaming service that users would be able to access from Internet-connected devices, is close to being ready but is being held up by a lack of content. Google managers told counterparts at the top four record companies last year that they hoped everything would be in place for a launch by late 2010. More recently, Google tentatively planned to demonstrate the service earlier this month at the South By Southwest conference. Neither ended up happening as Google Music keeps getting pushed back, although technically it still hasn't been officially announced.
Talks with at least some of the top publishers and four largest record labels are still ongoing. The delays are largely due to the fact that Google is negotiating for cloud music rights and not just the authorization to distribute the songs themselves. The search giant wants to be able to store users' existing music libraries on the company's servers. Labels are in similar discussions with Apple.
Labels have never given out licensing rights for digital lockers, so it's not like they can just grab an old template and work off that. They definitely do want Google to join the digital-music fray, however, as the possibility of a large iTunes competitor could mean Apple won't be able to bully music industry executives as easily. Currently, Apple has leverage because it dominates the market.
There's still no telling when we might see the unveiling of Google Music. The nearest event for such a launch is probably the Google I/O 2011, which is taking place on May 10 and May 11, 2011. We're not holding our breath.