Google Inc. (NASDAQ:GOOG) is challenging Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) by selling music. Google spent the last several weeks preparing deals with the four major music labels: Sony Music Entertainment, Warner Music, EMI, and Universal Music Group. The new Google service is expected to be called Google Audio.

When Google Audio launches, I wouldn’t be surprised if YouTube changes their default music purchase promotion to their own service. Currently when watching music videos on YouTube, there is a link to buy the song on iTunes or Amazon.com.

I don’t expect Google to do very well in this service because iTunes has already monopolized the music download market. iTunes is the number one music retailer in the world, even beating Wal-Mart. Google attempted to challenge iTunes by selling videos through Google Video, but it did not have much of a business impact.

In April Universal and YouTube announced that they are teaming up on a music video website project coined Vevo.  Today Sony Music Entertainment joined the Vevo venture.  Vevo will be launching later this year.

Between Universal and Sony, they represent artists such as Alicia Keys, Eminem, AC/DC, Lady Gaga, Akon, The Killers, The Black Eyed Peas, etc.  Warner Music and EMI have not yet planned on signing to Vevo yet.  Vevo will have music videos and possibly reality shows.

YouTube will handle the back-end of Vevo and the music labels will provide the music videos.  The President of Vevo will most likely be Universal Music executive Rio Caraeffas.

[via CNET]