Google's iTunes Competitor Might Be In Trouble

Kafka said that talks may have gone "backwards," and Google could be reconsidering its plans. At the same time, Kafka wrote that he had also heard earlier from those in the music industry that talks were going well, so there seems to be a bit of confusion as to actually what is going on here.

Wayne Rosso, former head of Grokster, had said Monday that Google was "at the end of their rope" with the whole process and was considering a cloud-based music storage service a la Amazon. That service did not seek the licensing of the music industry, obviously much to its chagrin.

So who's the fly in the ointment? Rosso believes its Warner Music Group. The label wants Google to charge at least $30 per year for the cloud storage, whereas Google wants to allow the first 500 tracks to be stored at no cost.

Just as a valuable aside, WMG is the same label that has reportedly held up the Spotify launch over concerns that it would hurt other streaming music services. Between it and Universal, I think the two companies are competing for who will be the most hated by digital music buffs, frankly!