Facebook to Launch an iTunes Competitor?

Facebook Looks To Be Taking a Page Out MySpace’s Book

A rumor is afloat, brought to the surface by Nick O’Neil that Facebook is working on a music service that will compete directly with iTunes. According to O’Neil’s sources,

“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.”

This is a very interesting rumor, and if true it is a signal that Facebook is looking to diversify their revenue streams in an attempt to create a long term sustainable business. There has been a lot of talk on this site about the lack of ad dollars flowing to developers, and with Zuckerberg’s recent trip to Redmond that was reportedly a “money run”, one has to wonder if Facebook is sensing a lack of interest in the platform from advertisers (causing them to miss some revenue projections) and are in desperate need of additional revenues from other channel.

Or maybe Facebook, like many open source companies have done in the past, is simply cannibalizing their developer community by launching their own versions of the most popular Facebook applications, such as social music discovery application, iLike. For now, we will just have to wait and see.

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